Brent: Supply risks keep prices elevated – Danske Bank
Danske Bank’s Danske Research Team highlights a sharp move higher in Brent as escalating Middle East tensions threaten key supply routes. The report notes Brent’s jump above USD 107/bbl and warns that closure of Saudi Arabia’s East-West pipeline could endanger up to 4% of global Oil supply.
Danske Bank's research team has pointed out a significant jump in Brent prices due to escalating Middle East tensions. Brent has surged above USD 107/bbl, with the team warning that the closure of Saudi Arabia's East-West pipeline could jeopardize up to 4% of global oil supply. The team anticipates that markets will remain vigilant for disruption risks and the restoration timeline.
Brent prices jumped around 3% at the start of trading, following news of new strikes on Saudi Arabia, attacks on vessels near the Strait of Hormuz, and the shutdown of the East-West pipeline. This pipeline is a crucial export route that circumvents the Strait of Hormuz, with its closure potentially putting up to 4% of global oil supply at risk.
Meanwhile, the ongoing tensions with the Houthis around the Bab el-Mandeb Strait have added to concerns over another vital transit route. With a scheduled Gulf-Iran meeting postponed, markets are expected to stay focused on potential further disruptions and the speed at which the East-West pipeline can resume operations.
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