World News
Oil Rises As Iran Preps For Military Action In Advance of U.S. Talks
With the U.S. preparing for military action against Iran if talks on Tuesday aimed at de-escalating tensions fail, oil on Monday rose about 1 percent – with additional support coming from China.
Brent settled up 90 cents, or 1.3 percent higher, at $68.65 per barrel; West Texas Intermediate was up 86 cents, also 1.3 percent higher, at $63.75 per barrel by 1914 GMT (the contract did not have settlement on Monday due to the U.S. Presidents Day holiday).
An Iranian diplomat said his countryI was pursuing a nuclear agreement with the U.S. with economic benefits for both sides, but tensions reached a boiling point on Monday with the Islamic republic launching live-fire naval exercises in the Strait of Hormuz in preparation for potential military threats in the strategic waterway.
For his part, U.S. president Donald Trump said a regime change in Tehran would be the "best thing that could happen" for Iran.
Bjarne Schieldrop, chief commodities analyst at SEB, said, "When/if the Iranian tension eventually fades, we'll likely see Brent crude trailing back down to the $60" level and below.
Bloomberg noted that also on Tuesday, talks to end the war in Ukraine are scheduled to start in Geneva, "though the prospects of a speedy end to the almost four-year-old conflict and the return of Russian barrels look slim," given that drone strikes on the Black Sea coast over the weekend damaged the Taman seaport and fuel tanks.
Meanwhile, according to traders and ship-tracking data, China's imports of Russian oil were set to climb for a third straight month in February, hitting a new record; but Giovanni Staunovo, an oil analyst at UBS, added that oil trading on Monday was supported by some disruptions in oil exports.
As for a longer-term view of market conditions, Citi on Monday said, "It is our base case that both Iran and Russia-Ukraine deals happen by or during the summer of this year, contributing to a decline in prices to $60-62/bbl Brent and lowering diesel and gasoline cracks by $5-10."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 484.50 | 2.00 | 670.00 | 1.50 |
| Rotterdam | 450.50 | 4.50 | 675.50 | 0.00 |
| Houston | 455.50 | 4.50 | 654.50 | 6.50 |
| Fujairah | 476.00 | 7.00 | 743.00 | 0.00 |
| Global 20 Ports Average | 510.00 | 0.50 | 762.50 | 2.50 |
| Global 4 Ports Average | 466.50 | 0.00 | 685.50 | 2.00 |
| Global Average Bunker Price | 555.00 | 1.50 | 801.50 | 2.00 |
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