West Texas Intermediate, or the US crude variant, continues to hover around or above the $95 per barrel mark after gaining over 3% on Tuesday. Brent settled at $103.5, above the $100 mark for the fourth day running, albeit below Monday’s high of $106.5.
US President Donald Trump on Tuesday said that it is not long before ships begin to move through the Strait of Hormuz again, although he did not share a definitive timeline for the same. He also lashed out at NATO and other allies for refusing to help in the US operations in West Asia by sending warships to secure the key energy chokepoint.
“The Larijani killing is a big deal, and may make Iran more desperate to disrupt oil flows,” said Aaron Stein, president of the Foreign Policy Research Institute. “Trump is obviously being pressured to escort tankers — so we’re in for the possibility of very tense US operations in ways I’m certain the Navy would like to avoid.”
US oil prices have risen by more than 60% this year already before the end of the first three months, most of it coming after the war began in Iran late February. Rising oil prices have also led to an impact on secondary products, stoking inflation fears across global economies.
Diesel costs in the US topped $5 a gallon this week, and that will be a key talking point during the ongoing Federal Open Markets Committee (FOMC) meeting, that will be announcing its decision on interest rates later tonight, which is widely expected to be a status quo.
A key UAE official also said that Iran miscalculated by attacking Gulf countries, pushing them closer to the US and Israel, while also showing why Iran’s missile and nuclear program cannot be accepted.
“With no end in sight to hostilities, shut-ins rising on a daily basis, and the Strait technically closed, we remain of the view that Brent is set to remain in a new, higher $95-$110 range,” said Robert Rennie, head of commodity research at Westpac Banking Corp. “Were we to see a major refinery plant hit or confirmation of additional mining of the strait, we would expect that range to extend higher by another $10-$20,” he added.
(With Inputs From Agencies)
