ANNIE ALLEN (UK Bureau Chief)
Oil prices surged more than 5% on Thursday as fears over a widening Iran conflict and mounting disruptions to global supplies sent shockwaves through the energy market.
Brent crude climbed as high as $5 a barrel before paring gains after US President Donald Trump said Washington would not launch an attack on Iran before November’s midterm elections. By 12:41 p.m. ET, Brent was up $3.48, or 3.5%, at $103.73 a barrel, while US West Texas Intermediate gained $2.69, or 3.1%, to $91.
The sharp reversal came after Trump said the United States was engaged in productive discussions with Iran, raising hopes that an escalation could be avoided.
Iran’s Tasnim news agency reported that Foreign Minister Abbas Araqchi was reviewing a US response to Tehran’s proposal for reopening the Strait of Hormuz within seven days, with a reply potentially coming within days.
But the oil market remains under pressure from continuing threats to Gulf shipping. Tanker attacks through the Strait of Hormuz reached their highest weekly level since the war began, while the waterway remains critical to global energy supplies.
About one-fifth of global oil and fuel shipments passed through Hormuz before the conflict, making any prolonged disruption a major threat to international energy markets.
“Constrained product flows, extreme logistics costs and high likelihood of Iranian escalation are keeping prices elevated,” said Saul Kavonic, head of energy at MST Marquee.
Adding to the supply concerns, Hurricane Isaias is disrupting US offshore production in the Gulf of Mexico. Shell and Chevron have curtailed operations, while BP has evacuated personnel and shut production at two platforms.
US Gulf producers had shut in about 25% of current oil production and 16% of natural gas production by Wednesday because of the storm, according to the Marine Minerals Administration.
US inventory data also supported prices, with crude stockpiles falling more than expected and diesel inventories declining slightly.
©Copyright MOTORING WORLD INTERNATIONAL. All rights reserved. Materials, photographs, illustrations and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior written permission from Motoring World International
Contact: editor@motoringworldng.com
