Brent gains as Trump signals prolonged Middle East conflict
The front-month ICE Brent contract has gained by $6.23/bbl on the day, to trade at $108.85/bbl at 09.00 GMT.
IMAGE: A crude oil storage facility. Getty Images
Upward pressure:
Brent’s price has once again rallied towards the $110/bbl mark, after US President Donald Trump signalled continued military operations against Iran, including possible strikes on energy facilities.
Although Trump said the conflict will soon come to an end, he did not offer any concrete timeline for a ceasefire agreement.
Oil market analysts see Trump’s remarks as a threat of further escalation – leading to more supply disruptions.
“The next couple of weeks will be critical. If exports from Persian Gulf producers remain constrained, they will be forced to cut production,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Meanwhile, Iran’s parliament approved a plan to collect tolls from shipowners for vessels transiting the Strait of Hormuz, Iranian state media reported, without disclosing the toll fees.
Tehran has “reiterated that the future of the key waterway will be decided by Iran and Oman,” Hynes said. “It’s unclear how quickly traffic in the Strait of Hormuz could resume if the US withdraws from the region,” he added.
Downward pressure:
Brent’s price gains were somewhat capped by a rise in US crude stocks.
Commercial US crude oil inventories increased by 5.5 million bbls in the week ending 27 March, according to data from the US Energy Information Administration’s (EIA).
“EIA figures showed crude stocks rose for a sixth consecutive week,” two analysts from ING Bank noted.
The EIA report comes a day after the American Petroleum Institute (API) reported a whopping 10.3 million bbls rise in crude stocks during the same time.
“Total crude inventories [reported by the EIA] climbed to 461.6m barrels [461.6 million bbls], the highest since June 2023 and close to the five‑year average,” ING Bank’s analysts said.
A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.
By Aparupa Mazumder
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