Brent gains as Middle East flare-up extends

The front-month ICE Brent contract has gained by $1.70/bbl on the day from Friday, to trade at $77.90/bbl at 09.00 GMT.

IMAGE: Oil storage faciltity. Getty Images

Upward pressure:

Brent’s price has climbed amid renewed hostilities in the Middle East – effectively shattering the temporary 60-day peace accord.

Another container vessel came under an Iranian missile attack off Oman’s coast yesterday, the United Kingdom Maritime Trade Operations (UKMTO) reported.

The US Central Command (CENTCOM) responded to the attack with strikes against 140 Iranian military targets, including missile and drone sites, naval capabilities, ammunition storage facilities and more.

The repeated attacks on commercial vessels have shattered the region’s fragile stability, with the recent escalation effectively throwing cold water on the now-defunct peace talks.

“There was no visible traffic in the strait on Sunday,” ANZ Bank’s senior commodity strategist Daniel Hynes said. “The maritime security threat remains severe,” he added.

Downward pressure:

While Brent’s price faces no immediate downward pressure today, market participants remain wary of weakening global crude oil demand.

The Paris-based International Energy Agency (IEA) expects global oil demand to decline by 1 million b/d in 2026 – stopping short of providing an average global oil demand forecast.

The IEA expects oil demand to decline this year, as the ripple effects of the Middle East geopolitical unrest continue to impact various products and regions.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online