Brent crude is set to close above $100 for the first time since 2022 as tensions around the Strait of Hormuz intensify.
ICE Brent is set to settle above $100 per barrel for the first time since August 2022, undeterred by the US’ easing of sanctions on Russia and the IEA’s mulled release of strategic petroleum stocks. The closure of the Strait of Hormuz sits front and centre to any oil price outlook, with Iran already striking at least 18 vessels since the US-Iran conflict started two weeks ago.
Iran’s New Supreme Leader Goes All In on Hormuz. Iran’s new Supreme Leader, Mojtaba Khamenei, the son of the previous ayatollah, has pledged to continue blocking the Strait of Hormuz, calling it a lever that must be used after unmanned Iranian drones struck two tankers anchored in Iraqi waters.
The World Is Ablaze; EU Sees No Problem. The European Union stated that it does not see any ‘immediate concern’ regarding the security of its oil supplies, even though its leading members, Germany, France, and Italy, have all announced SPR release in line with the IEA’s guidance.
US Grudgingly Admits Escort Difficulties. US Energy Secretary Chris Wright said that Navy escorts of oil tankers through the Strait of Hormuz are not possible currently, at the same time dismissing Tehran’s claims that oil will soon be traded at $200 per barrel, saying the world is well supplied with oil right now.
Russia Oil Sanctions Off for a Month. The US government issued a 30-day waiver for all countries to buy Russian oil and petroleum products currently at sea, provided they loaded before March 12, the latest move by the Trump administration to tame rising crude oil prices amidst blocked Hormuz Strait flows.
Glencore Didn’t Give Up on Rio Tinto Merger. The chief executive of global mining giant Glencore (LON:GLEN) Gary Nagle said that a recent surge in coal prices could bring back Australian peer Rio Tinto (NYSE:RIO) to the negotiation table, aiming to create the world’s largest mining firm worth $240 billion.
Brazil Brings Back the Oil Export Tax. Brazil’s government has scrapped federal taxes on diesel, seeking to mitigate the impending rally of the middle distillate, all the while imposing a 12% export tax on crude oil outflows, notably higher than the 9.2% export tax implemented in early 2023.
Trump Mulls Waiving the 1920 Jones Act. Seeking to tame soaring transportation fuels prices and ease product movements between US states, the Trump administration is considering waiving the century-old Jones Act, banning foreign ships from carrying out intra-US deliveries, for a period of 30 days.
Norway Forbids Its Ships to Enter the Gulf. Norway’s maritime authority has forbidden Norwegian-flagged ships, currently totalling almost 1,500 vessels or 1% of the global tonnage, to enter the Strait of Hormuz until further notice, fearing reputational damage from its tankers being targeted by drones.
Related: Six Stocks That Could Soar in an Era of Regional Instability
Exchanges Turn Against Treasury Intervention. A number of global exchanges, including CME Group and Toronto Stock Exchange parent TMX Group, have voiced their opposition to the idea of the US Treasury intervening in oil futures markets amid rising energy prices on the back of the Iran conflict.
US’ Largest Midwest Refinery All Set for Strike. The USW trade union representing workers at BP’s (NYSE:BP) 450,000 b/d Whiting refinery in Indiana have overwhelmingly (98%) rejected the UK major’s ‘last, best, and final’ collective contract proposal, setting the stage for high-level industrial action.
Colombia Joins the IEA. Colombia has joined the International Energy Agency, becoming its 33rd member country this week, however as a net oil exporter with production levels above 750,000 b/d the Latin American country would not be subject to the IEA’s strategic petroleum storage requirements.
China Doubles Down on BHP Pressure. China’s state-controlled iron ore buyer CMRG has prohibited domestic steel mills and traders to purchase Newman fines, an iron ore grade produced by Australia’s giant BHP (NYSE:BHP), even though negotiations on a potential 2026 term supply deal are still ongoing.
Tengiz Just Cannot Get Any Rest. Kazakhstan’s largest oilfield, the 950,000 b/d Tengiz project, has suffered another fire incident, less than two months after a power plant blaze debilitated production for several weeks. Operator TCO indicated that the current output of 875,000 b/d will not be impacted.
Australia Taps into SPRs as Inventories Shrink. Australia has become one of the first movers amongst IEA countries to tap into its strategic product stocks, pledging to release 5 million barrels of gasoline and diesel into the domestic market as China’s product export ban jeopardizes the country’s supply.
Iraq Pins Its Hopes on Truck Transfers. Iraqi oil producers slashed oil output by 3 million b/d as the closure of the Strait of Hormuz led to a tank-top situation across the country’s upstream and storage sites, with Baghdad hoping to move 200,000 b/d of crude in trucks to neighbouring Turkey and Jordan.
By Tom Kool for Oilprice.com
More Top Reads From Oilprice.com
