Brent Nears $96 as Iran Conflict Keeps Oil Market on Edge

Crude oil prices soared today, with Brent crude trading at $95.55 per barrel and West Texas Intermediate at $91.53 per barrel, as the war in the Middle East persists without a resolution. Iran and the United States exchanged missile strikes this week, while Israel's defense minister threatened to cripple Iran's infrastructure, including both military and civilian energy facilities.

ANZ analysts noted that the market is in a challenging phase as inventories help absorb the initial supply crisis, but maintaining balance becomes a concern as these buffers dwindle. ING's commodity team pointed out that escalation is supporting crude prices, though the rally may lose momentum if Hormuz shipments continue smoothly.

Reports indicated that Iraqi oil exports averaged 2.35 million barrels daily in August, with the majority transported via southern routes, thanks to Iran's permission for vessels carrying Iraqi crude to pass through Hormuz. Additionally, Saudi Arabia decided to maintain the price of its flagship Arab Light for October loadings, suggesting easing supply constraints.

However, this is not the case for fuels, where supply remains tight. U.S. Vice President JD Vance stated that Washington has no plans to engage in peace talks with Iran until it halts attacks on ships in the Strait of Hormuz, intensifying upward pressure on oil prices due to Iran's determination to maintain its hard stance in response to recent U.S. strikes, one of which resulted in civilian casualties.