Commodities
Home›Commodities›Energy›Brent nears $92 as Middle East supply risk lifts oil a…
Brent nears $92 as Middle East supply risk lifts oil and the dollar
Brent has surged toward $92 per barrel, helped by disruptions around the Strait of Hormuz and the Red Sea, while US strategic reserves have fallen by 5.3 million barrels in a week, raising the odds of oil prices above $100.
Brent crude has moved higher, surging toward about $92 per barrel as conflict-related shipping risks intensify in the Middle East, including turmoil around the Strait of Hormuz and Houthi attacks on oil infrastructure in the Red Sea, Action Forex reports.
The outlet links the move to geopolitics that has pulled the US dollar back into focus, noting that a 60-day ceasefire agreement between the US and Iran has expired. It adds that Washington has said it does not plan to extend the deal, while Tehran has threatened to escalate and seized a tanker in the Strait of Hormuz.
Action Forex also points to how energy prices have fed into inflation dynamics, saying that the decline in energy prices after earlier Middle East de-escalation helped slow US inflation. With the risk returning, it cites changes in market expectations for Federal Reserve tightening, including a higher probability of tightening this year, which has helped the greenback.
On the supply side, the brief highlights that transit volumes through the Strait of Hormuz have fallen sharply from a pre-war level of 18 million barrels per day to 4.9 million bpd, while other figures cited in the report, including a US Department of Energy estimate of 9 million bpd, are attributed to alternative routing and a so-called shadow fleet. It also says US strategic reserves have dropped to their lowest level since 1982, losing 5.3 million barrels in the last week alone, leaving less cushion against a potential oil rally above $100 per barrel.
Latest closeWTI crude $82.40 ▲1.4%|Brent $88.59 ▲1.8%