Brent steady amid rising geopolitical jitters

The front-month ICE Brent contract has remained unchanged on the day, to trade at $63.89/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Geopolitical escalations have continued to add upward pressure on Brent crude’s price this week.

The Russian army hit a loaded liquefied petroleum gas (LPG) tanker near the port of Izmail in Ukraine last night. The drone has struck Turkey-flagged LPG tanker MT Orinda, Turkey’s General Directorate of Maritime Affairs said on social media platform X (formerly Twitter).

This strike follows last week’s significant Ukrainian drone attack that damaged an oil depot and a vessel at the Black Sea port of Novorossiysk.

“Geopolitical risks continue to hang over the oil market,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

Besides, crude oil exports from Sudan were disrupted after a series of attacks hit energy facilities in the country, Bloomberg reported. These facilities serve “as a conduit for crude from landlocked South Sudan,” according to Hynes.

Downward pressure:

Brent’s price gains have been capped after loadings at the Novorossiysk port resumed over the weekend.

The Novorossiysk port, in the Black Sea, handles approximately 2.2 million b/d of oil exports, including Kazakhstan crude from the Caspian Pipeline Consortium (CPC) terminal, according to two analysts from ING Bank.

Oil prices fell as the impact of the strike on Russia’s Novorossiysk oil terminal was less severe than initially feared, market analysts said.

“Two tankers have subsequently moored at the [Novorossiysk] port, indicating operational activity,” Hynes said.

By Aparupa Mazumder

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