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Oil prices stay muted despite Middle East supply disruptions

WTI was last around $82.7 per barrel and Brent near $84.1, with the market leaning on past examples of supply rerouting rather than pricing in a major spike.

Reported · Written up by our desk · Energy

Oil prices have not surged as many expected since the start of March, despite severe disruption to Middle Eastern supply, OilPrice reports. The outlet says the disconnect partly reflects optimism that markets can adapt, but it cautions that adaptability has limits.

OilPrice contrasts today’s situation with 2022, when Russia’s invasion of eastern Ukraine triggered a sharp run-up in Brent, nearly reaching $140 per barrel. At the time, the main concern was that Western sanctions would cripple crude and fuel flows, yet Russian oil, gasoline, and diesel continued reaching overseas buyers.

The current backdrop is more disruptive in a more direct sense, OilPrice adds, noting that Iran closed the Strait of Hormuz and that oil infrastructure has been targeted by drone and missile strikes. The outlet also points to Gulf states shutting wells due to a lack of storage capacity.

Still, OilPrice says several producers have found ways to keep exports moving, including Saudi Arabia redirecting flows from the east to the west and shipping crude through the Red Sea port of Yanbu. It adds that the UAE redirected flows as well and that Iraq is considering a similar approach when it builds the needed capability.

Latest closeWTI crude $81.23 ▼1.7%|Brent $85.92 ▼2.8%|Gasoline (RBOB) $3.164 ▼4.9%

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