1 week ago
Oil Rises as UAE-Iran Tensions Heighten Regional Energy Risks
Oil prices went up because people worried that fighting in the Middle East could disrupt supplies.
The United Arab Emirates accused Iran of firing missiles at its territory and said it would end economic ties with Iran.
Brent oil traded near $92 per barrel.
U.S. refineries used more crude than at any time since September 2019.
U.S. crude inventories still grew by 4.4 million barrels last week.
Supplies of diesel and other distillate fuels fell, making those fuels more expensive.
The war involving Russia and Ukraine has also hurt energy supplies by affecting refineries.
Some tankers turned around near the Strait of Hormuz because the area remained dangerous.
Oil producers continued moving some oil through the strait, which helped prevent prices from rising even more.
Brent crude traded near $92 a barrel, reaching its highest level in almost three weeks.
The United Arab Emirates said it was cutting all economic ties with Iran after accusing it of firing ballistic missiles at UAE territory.
U.S. refinery runs reached their highest level since September 2019, while domestic crude inventories increased by 4.4 million barrels.
U.S. distillate inventories fell by 1.5 million barrels to their lowest level in more than a month, pushing diesel costs higher.
Three China-linked supertankers turned around in the Strait of Hormuz, while oil shipments through the chokepoint continued despite elevated risks.
- Who
- The United Arab Emirates, Iran, U.S. refiners, Persian Gulf oil producers, and oil traders are central to the report; U.S. President Donald Trump also commented on talks with Iran.
- What
- Oil prices rose as UAE-Iran tensions and risks around the Strait of Hormuz supported energy markets.
- Where
- The tensions and shipping risks involve the United Arab Emirates, Iran, the Persian Gulf, and the Strait of Hormuz; refinery and inventory data came from the United States.
- When
- The latest developments were reported after a 60-day U.S.-Iran ceasefire expired; U.S. inventory data covered the previous week, and a vessel was hit on Tuesday.
- Why
- Markets were concerned about potential supply disruptions, while higher refinery demand and falling distillate inventories also supported prices.
Key facts
- Brent price
- Near $92 a barrel, its highest level in almost three weeks.
- UAE-Iran dispute
- The United Arab Emirates said it was cutting all economic ties with Iran after accusing Iran of firing ballistic missiles at its territory.
- U.S. refinery runs
- Reached their highest level since September 2019, led by the Gulf Coast.
- U.S. crude inventories
- Rose by 4.4 million barrels in the latest weekly data.
- Distillate inventories
- Fell by 1.5 million barrels to their lowest level in more than a month.
- Diesel refining margin
- The U.S. margin for producing diesel from crude exceeded $100 a barrel, an all-time high.
- Strait of Hormuz
- Three China-linked supertankers turned around, while a vessel leaving the strait was reportedly hit by a projectile, causing one casualty.
Quotes
Arne Lohmann Rasmussen
Chief analyst at Global Risk Management
““A combination of the escalation between the UAE and Iran, coupled with a market increasingly pricing a ‘closed for longer scenario,’ keeps oil and refined products supported.””
livemint.com
Sources
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