Nicolai Haugsted
Oil prices are rising again – here’s how much they’ve jumped
Energy markets started the week on edge after renewed military exchanges between the United States and Iran reignited concerns about oil supplies moving through one of the world’s most important shipping routes.
According to Reuters, crude prices moved higher on Monday as traders weighed the impact of fresh attacks around the Strait of Hormuz, despite signs that Washington and Tehran are trying to prevent the latest escalation from spiraling further.
Supply fears return to the market
Brent crude rose 0.8% to $72.57 a barrel, while US West Texas Intermediate gained 1.3% to reach $70.11.
Analysts at ING said uncertainty continues to dominate the market.
“There’s still plenty of risk facing the oil market. Even so, participants appear to be … focusing on what a continued recovery in oil flows would mean for the global balance,” the bank wrote.
“This complacency is odd and clearly leaves significant upside risk if the supply recovery proves slow.”
Strait of Hormuz back in focus
Oil prices had fallen sharply last week after shipments through the Strait of Hormuz climbed to their highest levels since fighting between the United States, Israel and Iran intensified earlier this year.
That recovery has since lost momentum.
Renewed attacks on vessels in the strategically vital waterway, including a Qatar-linked oil tanker, triggered retaliatory strikes by both Washington and Tehran, marking the most serious escalation since the two sides agreed to an interim peace deal.
Despite the renewed violence, a US official said on Sunday that both countries had agreed to halt the latest hostilities in the Gulf and resume negotiations over their dispute involving the Strait of Hormuz.
Analysts warn recovery may take months
Market analysts believe traders may have underestimated how long it could take for regional oil supplies to fully recover.
“The market is likely to re-evaluate its assumption of a quick recovery of oil supply from the Persian Gulf,” analysts at ANZ said.
“Physical flows are constrained by tanker backlogs, damaged infrastructure and production shut-ins. It could take the remainder of the year before supply is near pre-conflict levels.”
Aramco resumes exports despite fatal crash
Saudi energy giant Aramco restarted crude loadings on Friday at its Ras Tanura terminal after operations had been suspended for nearly four months as producers prepared for an interim agreement.
Loading operations continued even after one of the company’s helicopters crashed near Ras Tanura on Sunday, killing 14 nationals.
The cause of the crash has not yet been determined.
