Brent gains after US sets deadline for Iran to reopen Hormuz
The front-month ICE Brent contract has gained by $4.36/bbl on the day from Friday, to trade at $113.33/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent’s price has gained nearly $5/bbl at the start of this week as tensions in the Middle East have amplified.
Over the weekend, US President Donald Trump issued a warning that Washington would “obliterate” Tehran’s power plants within 48 hours, if its forces continued to block vessel movement through the Strait of Hormuz.
The deadline is set to expire today evening in Washington. Market analysts expect a sharp volatility in Brent’s price over this period.
“US officials said the White House is sending hundreds of Marines to the Middle East as it weighs up a plan to seize Iran’s Kharg Island oil export hub,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Meanwhile, Israel's health ministry said about 180 people were injured in Iranian missile strikes on two southern Israeli towns close to a nuclear facility, the BBC reported.
Around 116 people were injured in Arad and 64 in Dimona, after ballistic missiles hit the region on Saturday.
Downward pressure:
Brent’s price gains were partly held back by expectations of some supply relief in the market.
The International Energy Agency’s (IEA) executive director Fatih Birol said the energy agency is prepared to release more crude stockpiles “if necessary,” Reuters reported.
Earlier this month, the IEA agreed to release 400 million bbls of crude oil from strategic reserves, as the conflict in Iran continues to destabilise oil flows through the Persian Gulf.
In another news, the total number of rigs drilling for crude oil in the US rose by two to 414 units last week, according to Baker Hughes.
The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.
By Aparupa Mazumder
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