Brent crude prices remain between the $103 – $104 a barrel range, while West Texas Intermediate (WTI) or the US crude futures trade below the mark of $100 a barrel.
Over the weekend, Saudi Arabia issued air-raid alerts for Riyadh, for the first time since the height of the Iran war in March-April, along with warnings in Red Sea hubs including Yanbu. Explosions were heard near the King Khaled Airport in Riyadh with Houthis continuing to attack regions close to the Bab el-Mandeb strait.
Similarly, the Moscow Oil Refinery was hit by Ukraine’s drone attacks on Sunday, part of the largest overnight drone attack of the year on Russia. Ukraine has been on the offensive on Russia’s energy infrastructure to tighten the market, particularly diesel. The Moscow oil refinery has a capacity of 2,45,000 barrels per day.
Why are oil markets not reacting to adverse developments?
Multiple factors are behind the subdued reaction to these adverse weekend developments. First, US President Donald Trump said that he would probably be open to a meeting with Iran President Masoud Pezeshkian, when he travels to the US for the United Nations General Assembly summit later this week. Trump is already set to host Chinese President Xi Jinping this Thursday and may also meet leaders of other Gulf nations.
Additionally, Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani said that messages continued to be exchanged between both parties, something that Iran has acknowledged as well, reiterating their conditions to return to the June MoU, which include ending of the war on all fronts, unfreezing of frozen Iranian assets and removal of the naval blockade around Iranian ports.
Lastly, US Central Command Chief Admiral Brad Cooper said that oil and LNG shipments through the Strait of Hormuz have hit a six-month high over the last two weeks. Satellite images also showed Saudi Aramco loading at least seven oil supertankers or 14 million barrels simultaneously across its Ras Tanura and Ju’aymah terminals.(With Inputs From Agencies)
