Brent gains as Iranian supply concerns escalate

The front-month ICE Brent contract has gained by $0.72/bbl on the day from Friday, to trade at $63.20/bbl at 09.00 GMT.

IMAGE: Oil pump jacks. Getty Images

Upward pressure:

Brent crude’s price has rallied due to growing geopolitical unrest in the Middle East.

Oil market analysts are concerned that the ongoing protests in Iran, that began two weeks ago, could threaten oil supply.

“Protests [in Iran] have continued for more than a week amid concerns of a collapse in the local economy,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

The OPEC member pumps around 3.2 million b/d of crude oil, making it the fourth-largest producer of the group.

“The situation puts at least 1.9mb/d [1.9 million b/d] of oil exports at risk of disruption,” Hynes added.

Downward pressure:

Venezuela is expected to resume oil exports soon, Reuters reported. This news has put some downward pressure on Brent’s price today.

Last week, US President Donald Trump said Venezuela’s interim administration would be “turning over” between 30 million to 50 million bbls of sanctioned oil to be sold at market price.

The end of Maduro presidency in Venezuela could add fresh barrels to an already oversupplied market, according to analysts.

“US Treasury Secretary Scott Bessent has said that further sanctions against Venezuela may be lifted as early as this week to facilitate oil sales,” two analysts from ING Bank added.

By Aparupa Mazumder

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