Has Iranian Crude Become Irrelevant to Global Oil Supply?
The reinstated U.S. blockade on Iranian oil exports is effectively preventing Tehran from exporting oil, making Iran’s oil volumes irrelevant for global oil market balances, Bob McNally, president of Rapidan Energy Group, told CNBC on Thursday. The U.S. brought back the blockade in the Gulf of Oman aimed at preventing Iran from exporting its oil after the ‘deal to make a deal’ collapsed in July…
The recent reinstatement of the U.S. blockade on Iranian oil exports is causing Iran's oil volumes to become negligible in the global oil market, according to Bob McNally, president of Rapidan Energy Group. The U.S. re-imposed the blockade in the Gulf of Oman following the collapse of the 'deal to make a deal' in July and the resurgence of Middle East hostilities.
The blockade, which had been lifted briefly in June and early July, now effectively prevents Iran's oil exports, with Kharg Island, Iran's key oil export terminal, no longer operating. Consequently, Iran has ceased to be a significant factor in the oil market concerning its exports. However, refined products are indicating a tighter global oil market, despite Iran's removal from the barrels count.
Refined products are signaling the market's concern over the potential for tighter supply, with the diesel crack spread reaching record highs in both the U.S. and Europe. Brent Crude prices surged past $91 per barrel this week due to heightened security risks in the Middle East and dwindling hopes for renewed negotiations between the U.S. and Iran.
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