The benchmark West Texas Intermediate (WTI) oil price seems to extend its winning streak that began on March 27, buoyed by escalating geopolitical tensions and the looming possibility of disruptions in oil supply.
WTI crude is trading around $86.20 a barrel in Asian trading on Friday.
The rise in crude oil prices is attributed to the potential threat of supply disruptions amid escalating geopolitical tensions, particularly after Israel attacked Iran’s embassy in Syria.
However, Israel has not officially claimed responsibility for the attack on Iran’s embassy compound in Syria on Monday.
Furthermore, reports of increased threats against the Israeli embassy in the United States by Iran have added to market concerns. Iran has pledged retaliation for an attack that resulted in the death of senior Iranian military officials.
Additionally, according to NATO officials on Thursday, ongoing Ukrainian drone attacks on refineries in Russia may have disrupted over 15% of Russian capacity.
Lukoil refinery
Furthermore, a Lukoil refinery in Russia is facing challenges in repairing its gasoline unit as the American firm Universal Oil Products (UOP) has declined to assist Lukoil. UOP had withdrawn from Russia following the country’s invasion of Ukraine in February 2022.
On Thursday, the U.S. imposed fresh counterterrorism sanctions related to Iran against Oceanlink Maritime DMCC, based in the United Arab Emirates, along with its vessels. This action was taken due to the company’s involvement in shipping commodities for the Iranian military.
The Treasury Department stated that the U.S. is utilising financial sanctions as a measure to isolate Iran and hinder its capacity to finance its proxy groups, while also supporting Russia’s conflict in Ukraine.
This week, the Organisation of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, decided to maintain their current oil supply policy unchanged.
The voluntary production cuts, totaling 2.2 mln barrels per day, will continue until at least the end of June. These cuts supplement the existing agreement reached in 2022, which already encompasses reductions of 3.66 mln bpd.
(Source: OANDA)
