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Brent oil jumps above $90 amid Persian Gulf disruption risk

ING says only 2 visible outbound tankers transited the Strait of Hormuz, while the end of US SPR releases around month end could leave oil more exposed to supply shocks.

Reported · Written up by our desk · FX Futures

Brent crude has broken above US$90 per barrel as escalating conflict in the Persian Gulf disrupts shipping flows, ING analysts Warren Patterson and Ewa Manthey said. They warned that potential chokepoint closures could raise the risk of additional supply shocks.

ING pointed to signaled vulnerability from transport disruptions, citing LSEG data showing only 2 outbound visible oil tankers transited the Strait of Hormuz, with no inbound traffic. The analysts said vessel flows have essentially returned to levels seen before a Memorandum of Understanding.

The analysts also flagged that US Strategic Petroleum Reserve releases, which they said have offered some relief during the war, are set to cease around the end of this month. They said that could leave the market more vulnerable, with the possibility of further SPR taps.

ING further noted positioning shifts, saying speculators increased their net long in ICE Brent by buying 114,752 lots over the last reporting week to a net long of 169,839 lots as of last Tuesday. For ICE gasoil, they said net longs rose by 2,389 lots over the week to 71,875 lots, with further buying possibly visible in the next Commitment of Traders report.

Latest closeWTI crude $79.00 ▼0.8%|Brent $84.94 ▼0.0%

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