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Back on March 24, a little over three weeks into an Iran Conflict which President Donald Trump initially estimated would last for “2 to 4 weeks,” I wrote here that drivers should expect gasoline prices at the pump to be higher for longer than the White House was then projecting. That piece was in part based on a report from Enverus presciently titled “The Return of $100 Oil,” and partly on my own assessment of the forces then in play in global oil markets.
Iranian oil is helping keep costs down by at least $7.50 per barrel. Goldman Sachs warns on oil prices and so called tank bottoms ( and loves a new natural gas-related name).
Crude oil markets continue to rally on war headlines in the Middle East, as we are seeing a market that is worried about supply express itself through higher pricing.
Saudi Aramco has offered additional crude cargoes for loading from Egypt's Mediterranean port of Sidi Kerir, according to five trading sources, signalling a potential shift in export routes as Houthi threats to shipping raise risks for oil movements through the Red Sea and the Bab el-Mandeb strait.
Bob McNally, founder and president of Rapidan Energy Group, warns oil prices could move sharply higher if the conflict around the Strait of Hormuz expands to the Red Sea, warning that the market has largely exhausted the buffers that helped contain the initial shock. McNally says China is beginning to increase crude imports again, the available reserve-release buffer is largely spent and refiners are running at precariously high utilization rates.
The U.S. enters a 12th straight day of bombing Iran as pressure mounts to reopen the Strait of Hormuz. Alex Coffey talks about the latest developments as crude oil climbs back to $90 a barrel.
For a brief time earlier this year oil prices dictated the stock market direction. After weeks in the wilderness, energy markets could be about to play that role again.
Some Chinese refiners have ramped up purchases of sanctioned Russian crude despite shrinking discounts, as an escalation in the Iran war disrupts exports from the Middle East, sources familiar with the situation said.