Brent nears $115/bbl as Hormuz blockade persists
The front-month ICE Brent contract has gained by $3.66/bbl on the day, to trade at $114.70/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
Brent crude’s price has continued to trade higher amid persistent blockade of the Strait of Hormuz.
US President Donald Trump has ordered an extension of the Hormuz blockade, the Wall Street Journal reported citing officials.
Meanwhile, more than 20 Iranian oil tankers were diverted and anchored at Iran's Port of Chah Bahar yesterday, outside the Strait of Hormuz, US Central Command (CENTCOM) reported.
The vessel backlog between the Strait of Hormuz and the US blockade line indicates that Washington has succeeded in intercepting Iranian vessels, according to market analysts.
“Crude oil extended recent gains, as the market frets over the ongoing closure of the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said. “Stalled peace talks have raised the prospect of an indefinite disruption to oil supplies from the Persian Gulf,” he added.
Downward pressure:
The UAE will exit OPEC and OPEC+ from 1 May, the country's energy minister Suhail Al Mazrouei said in a statement yesterday.
The UAE’s national oil company, Abu Dhabi National Oil Company (ADNOC) has set a target to raise crude oil production capacity to 5 million b/d by 2027.
“The UAE’s exit from OPEC is a big blow to the group,” two analysts from ING Bank noted. “It’s the highest-profile exit from OPEC in recent years,” they said.
The UAE’s oil output is currently capped at 3.41 million b/d under the OPEC+ quota system.
“In the short term, this development has little impact on the market. But in the medium to longer term, it means more supply for the market,” ING Bank’s analysts noted.
By Aparupa Mazumder
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