Brent gains amid growing threats in the Persian Gulf
The front-month ICE Brent contract has gained by $2.30/bbl on the day, to trade at $100.19/bbl at 09.00 GMT.
IMAGE: Strait of Hormuz. Getty Images
Upward pressure:
Brent crude’s price has moved above $100/bbl this week amid persisting tensions across the Persian Gulf.
Iran will continue blocking the Strait of Hormuz – which handles 20-25% of global seaborne oil trade daily – the BBC reported, referring to a statement by Iran’s newly appointed Supreme Leader Mojtaba Khamenei.
“Iran launched a new offensive, targeting ships and ports in the Persian Gulf, underscoring the widening threat to energy supply,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
The US forces have struck more than 60 Iranian vessels since the beginning of the conflict on 28 February, the US Central Command (CENTCOM) official Brad Cooper said.
“The clock is ticking for the oil markets, with developments in the Persian Gulf choking off as much as 20 million barrels a day of oil supply,” ING Bank’s head of commodities strategy Warren Patterson said.
Downward pressure:
The International Energy Agency (IEA) has agreed to release 400 million bbls of crude oil from strategic reserves as the US-Israeli conflict with Iran continues to disrupt oil flows through the Persian Gulf.
This is the sixth time a coordinated emergency stock release is occurring in the IEA’s history, the agency said, adding that all 32 member countries have backed the move.
Individual allocations from member countries have yet to be detailed. The US, however, will contribute 172 million bbls from its Strategic Petroleum Reserve (SPR) as part of the IEA-led effort, the US Department of Energy (DoE) said in a statement.
“It’s a record amount, eclipsing the 182m barrel [182 million bbls] emergency release from 2022. We're still waiting for the IEA to provide full details of the release,” ING Bank’s analysts said.
By Aparupa Mazumder
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