Oil rose for a third straight session as the world's markets priced in a risk that has not yet become reality: the possibility that the United States may strike Iran. Brent and WTI have climbed about five percent since January 26, reaching their highest levels since late September, not because barrels are scarce today but because they may become scarce tomorrow. It is a reminder, familiar across the history of energy, that the price of a commodity often carries the weight of conflicts still unwritten.
Oil Extends Rally to a Third Day as Fears of a U.S. Strike on Iran Tighten Supply Outlook
The move has been driven less by a shortage today than by one that may come
Mark
Three days of gains, about 5%. Is that big for oil?
Mimi
It's meaningful, mostly because of the starting point. Brent is near $69 and WTI at $63.79, both the highest since September 29.
Mark
And the cause is a strike that hasn't happened?
Mimi
Right. A U.S. naval group has arrived in the region and Trump has threatened strikes over Iran's nuclear programme. Traders are pricing the risk.
Luke
Worth being clear about the Reuters report, though. It says Trump is considering options, citing unnamed U.S. sources. That's not a decision.
Mimi
Fair. The reporting supports considering, not planning or ordering.
Mark
Citi says the risk adds $3 to $4 a barrel. How solid is that?
Luke
It's Citi's estimate, and they said 'potentially.' It's one bank's read, not a measured figure. Same with the $72 Brent scenario, which depends on further escalation.
Mimi
The inventory data is firmer. The EIA reported a 2.3 million barrel drop to 423.8 million, against an expected 1.8 million rise.
Mark
Why does Iran's 3.2 million barrels a day matter so much?
Mimi
It's the fourth-largest output in OPEC, so disruption would be felt.
Luke
Though the source doesn't say how much supply would actually be lost in any scenario. That's unknown.
Mark
So the story is about expectations as much as barrels.
Mimi
Yes, especially since markets expected a big oversupply this year.
O Pulso
- Brent crept toward $69 and WTI toward $64 as traders bet on a possible U.S. strike against Iran.
- Washington's demands that Tehran end its nuclear programme, backed by threats and a naval group in the region, have pushed nerves to their highest point since September.
- Reuters sources say Trump is weighing strikes on Iranian security forces and leaders, a step that could reshape the supply picture of OPEC's fourth-largest producer.
- Citi estimates the geopolitical premium has added $3 to $4 a barrel, and warns Brent could climb to $72 if tensions escalate.
Oil rose for a third straight session as the world's markets priced in a risk that has not yet become reality: the possibility that the United States may strike Iran. Brent and WTI have climbed about five percent since January 26, reaching their highest levels since late September, not because barrels are scarce today but because they may become scarce tomorrow. It is a reminder, familiar across the history of energy, that the price of a commodity often carries the weight of conflicts still unwritten.
Oil prices climbed for a third straight session on Thursday, driven by fear rather than any immediate shortage. Brent crude rose to about $68.9 a barrel and West Texas Intermediate to $63.79, both up roughly five percent since January 26 and at their highest since September 29. The anxiety centres on Washington, where President Donald Trump has pressed Iran to abandon its nuclear programme, backed by threats of military strikes and the arrival of a U.S. naval group in the region.
The stakes are considerable. Iran pumps about 3.2 million barrels a day, making it the fourth-largest producer in OPEC, so any conflict touching its output or exports would ripple through the global supply picture. Reuters, citing U.S. sources, reported that Trump is weighing strikes on Iranian security forces and leaders, with the aim of sparking protests that could topple the regime.
Citi has put a number on that unease, estimating the threat has added $3 to $4 a barrel in geopolitical premium and warning Brent could reach $72 if tensions escalate. A surprise drop in U.S. crude inventories, down 2.3 million barrels, also tightened the short-term balance. Combined with U.S. restrictions on Russian oil and steady Chinese buying, it marks a turn from the oversupply markets had expected at the start of the year. The open question is whether threats become action, and whether Brent tests Citi's $72 mark.
Oil climbed for a third straight session on Thursday, and the reason sat well outside the trading screens: growing concern that the United States may attack Iran. By 0216 GMT, Brent crude futures had gained 50 cents, or 0.73%, to $68.9 a barrel. U.S. West Texas Intermediate rose 58 cents, or 0.92%, to $63.79.
Both benchmarks have gained about 5% since January 26 and now stand at their highest levels since September 29. The move has been driven less by a shortage of barrels today than by the possibility of a shortage later.
The pressure is political and military. U.S. President Donald Trump has stepped up demands that Iran end its nuclear programme, backing them with threats of military strikes, and a U.S. naval group has arrived in the region. Iran is the fourth-largest producer in the Organization of the Petroleum Exporting Countries, pumping 3.2 million barrels per day, so any conflict that touches its output or exports would matter to the global supply picture.
Reuters reported on Thursday, citing U.S. sources familiar with the discussions, that Trump is weighing options to attack Iranian security forces and leaders. The aim under consideration, according to those sources, would be to inspire protests that could potentially topple the current regime.
Citi put a number on the anxiety. In a note on Wednesday, its analysts said the potential for an Iran strike has raised the geopolitical premium in oil prices by potentially $3 to $4 a barrel. They added that further escalation could lift Brent as high as $72.
A second factor supported prices as well. The Energy Information Administration said on Wednesday that U.S. crude inventories fell by 2.3 million barrels to 423.8 million barrels in the week ended January 23. Analysts polled by Reuters had expected a rise of 1.8 million barrels. The United States is the world's biggest oil consumer, and the surprise drew attention.
Linh Tran, a market analyst at XS.com, said the result suggests the short-term supply-demand balance has tightened, reflecting steady refinery demand and constrained barrels available to the market.
Citi said prices may stay elevated more broadly, citing rising geopolitical risks, U.S. restrictions on Russian oil purchases and continued Chinese buying. That is a notable shift, since markets entered the year expecting a large oversupply. What to watch now is whether the U.S. moves from threats to action, and whether Brent tests the $72 level Citi has flagged.
Citações Notáveis
The potential for Iran getting hit has escalated the geopolitical premium of oil prices by potentially $3 to $4 per barrel.— Citi analysts, note on Wednesday
The short-term supply-demand balance has tightened, reflecting steady refinery demand and constrained barrels available to the market.— Linh Tran, market analyst, XS.com
Quer a matéria completa?
Leia o original em The Economic Times ↗
Politics & Governance