Brent: Middle East risks support prices – ING
ING analysts Warren Patterson and Ewa Manthey note Brent is up around 3% as Saudi Arabia’s East-West pipeline shutdown intensifies supply concerns following recent attacks.
ING analysts Warren Patterson and Ewa Manthey report that Brent crude prices have risen by around 3% following Saudi Arabia's shutdown of the East-West pipeline. This move has heightened supply concerns following recent attacks in the Middle East. The analysts highlight the elevated geopolitical risk around the Strait of Hormuz, tight middle distillate markets, and record gasoil and diesel cracks.
Despite the IEA cutting demand forecasts aggressively, inventory draws remain strong. The analysts maintain a base case of Brent averaging $80/bbl in the fourth quarter of 2026, but the recent developments suggest a shift towards their more pessimistic scenario. The IEA now forecasts global oil demand to fall by 2.5m b/d year-on-year this year, a more significant decline than previously anticipated.
Tight middle distillate markets, with gasoil and diesel cracks hitting record highs, are further compounding the issue. The ban on diesel exports from Russia has also tightened global markets, adding to the challenges faced by the oil industry.
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