Oil: Risk premium builds with Persian Gulf tensions – ING
ING analysts Warren Patterson and Ewa Manthey say Oil prices are grinding higher, with ICE Brent close to $100/bbl as Middle East tensions escalate and OPEC output falls.
ING analysts have reported that oil prices are surging, nearing $100 per barrel as tensions in the Middle East escalate. The analysts, Warren Patterson and Ewa Manthey, point to US strikes on Iranian tankers, Iranian missile retaliation, and disruptions to Saudi oil supply as key factors. They suggest the market will likely maintain a significant risk premium while the Strait of Hormuz sees only gradual recovery in oil flows.
The oil market has been on an upward trend, with ICE Brent nearing the $100/bbl mark. The US has conducted further strikes on Iranian oil tankers near Kharg Island, leading to Iran firing ballistic missiles towards Jordan and warning other vessels in the Persian Gulf. OPEC's preliminary production data indicates a substantial decline in August, with Saudi Arabia's output down by 1.12 million barrels due to the escalating situation.
Analysts believe the market is pricing in a substantial risk premium while China's large crude inventories could help maintain lower import levels if tensions in the Middle East disrupt supply further.
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- The Commodities Feed: Oil nears $100/bbl amid Persian Gulf escalation hellenicshippingnews.com
