Brent gains as US-Iran conflict drags on

The front-month ICE Brent contract has gained by $1.38/bbl on the day from Friday, to trade at $89.21/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude’s price continues to trade close to the $90/bbl mark, as the conflict between Washington and Tehran deepens.

The 60-day peace accord signed on 17 June, setting a deadline for ending the war with Iran and reaching a permanent deal on Tehran’s nuclear program, is set to expire today.

Washington and Tehran are further apart than they were two months ago, according to market analysts.

Over the weekend, two separate commercial tankers, attempting to transit the Strait of Hormuz, came under drone attacks. Both vessels were subject to minor damages.

“Prices remained supported by renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz, raising concerns over regional supply disruptions and complicating prospects for a US-Iran deal,” two analysts from ING Bank noted.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by one over the week to 455 units last week.

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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