Brent surpasses $70/bbl mark on supply concerns

The front-month ICE Brent contract has gained by $0.27/bbl on the day, to trade at $70.08/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent’s price has continued to draw some support as tensions build between the US and Iran amid US President Donald Trump's threats to attack the OPEC nation.

The oil market is becoming “increasingly nervous” over potential US strikes if Iran does not make a deal regarding its nuclear ambitions, two analysts from ING Bank noted.

Iran produces about 3.2 million b/d of crude oil, so any escalation could potentially disrupt supply from the Middle Eastern region, according to market analysts.

“Iran accounts for about 3% of global supply. It’s clear that the market is now pricing in a geopolitical risk premium amid the risks to supply disruptions,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent’s price has come under downward pressure on some easing supply concerns.

Earlier this week, Kazakhstan’s pipeline operator Caspian Pipeline Consortium (CPC) said full loading operations have resumed at its Black Sea terminal, after maintenance was completed on one of three mooring points.

Loadings were previously suspended after the mooring points were damaged in a Ukrainian drone strike.

“With this repair work complete, loadings should normalise, helping to ease some of the tightness,” ING Bank analysts said.

By Aparupa Mazumder

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