Oil is headed for the biggest weekly surge since 2022 as the war in West Asia unleashed a wave of disruption across energy markets, with producers, importers and shippers struggling to deal with the fallout.
Brent rallied 16% last week, although prices retreated toward $84 a barrel last Friday after President Donald Trump signalled “imminent action” to reduce pressure on prices, and the Treasury Department eased curbs on India’s ability to buy Russian oil.
Iranian Foreign Minister Abbas Araghchi told NBC News that his country had no intention to negotiate and was ready for a possible US ground invasion. Israel, meanwhile, launched another broad wave of strikes against Iran, and Saudi Arabia and Qatar said they had intercepted drone and missile attacks.
With importers struggling to get barrels, the US Treasury Department’s Office of Foreign Assets Control issued a short-term waiver to allow India to buy Russian crude. The move “only authorises transactions involving oil already stranded at sea,” Treasury Secretary Scott Bessent said.
Oil markets have been shaken by the conflict, which has ensnared about a dozen nations since the US and Israel launched their campaign on 28 February. As the hostilities have flared, shipping through the Strait of Hormuz has been impacted, choking off oil supplies to global markets and prompting producers to start shutting-in output. Refineries and tankers have been hit.
Goldman Sachs Group warned that a prolonged closure of the waterway — which typically carries about a fifth of global oil flows — could lift prices far higher, although the bank’s base case at present is for a gradual recovery of shipments and futures to average $76 a barrel in the second quarter. “Let’s say you have another five weeks of very low flows of oil through the strait,” Samantha Dart, C...
US Interior Secretary Doug Burgum said the administration was weighing a range of options for addressing the spike in oil and gasoline. “Everything is being considered,” Burgum said, adding that the list included actions that would have immediate impact as well as longer-term, more complex moves.
Possible decisions includes a release from the country’s emergency oil inventory, potentially in coordination with other nations to maximise effect.
Administration officials, however, have so far not moved to tap the Strategic Petroleum Reserve, a cache of crude held in vast underground caverns.
In Asia, signs of strain for top economies are mounting. China has told major refiners to suspend exports of diesel and gasoline, reflecting efforts to prioritise domestic needs.
Elsewhere, Japanese refiners asked their government to release oil from strategic reserves.
As the conflict widens, constraining supplies from the Middle East, Saudi Arabia raised the price of its main oil grade for buyers in Asia for April by the most since August 2022. Riyadh is also diverting millions of barrels to its Red Sea ports to avoid the Strait of Hormuz. Product prices have also soared. In Europe, low-sulfur gasoil futures have rallied by about 41% so far this week, the bigge...
In a sign of near-term tightness, Brent’s prompt spread — the difference between its two nearest contracts — widened to more than $4 a barrel in backwardation, a bullish pattern. A month ago, it was 58 cents.
Source Name : Economic Times