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Iranian media: A powerful explosion occurred in Tehran.On March 14, US President Trump stated that the US military would launch a "fierce airstrike" against Iran next week. He declined to comment on whether the US was attempting to seize Kharg Island, Irans oil export hub. Trump stated that the US does not need Ukraines anti-drone technology to defend against Iranian drones. Previously, reports indicated that the US was considering seizing Kharg Island, located in the Persian Gulf, as military action against Iran continued. Kharg Island is Irans largest crude oil export base, handling 90% of the countrys oil exports. In an interview on March 13, Trump refused to answer related questions, stating that seizing Kharg Island was "not a priority." Trump reiterated in the interview that the US military would escort oil tankers through the Strait of Hormuz if necessary.On March 14th, the Afghan Ministry of Defense announced that on the afternoon of the 13th, local time, a drone strike targeted a key military center in Islamabad, the capital of Pakistan. The Ministry stated that the attack caused significant casualties and property damage in Pakistan. Later that day, Pakistans Ministry of Information and Broadcasting stated that Pakistani security forces successfully intercepted two makeshift drones operated by a government-backed "terrorist organization." Aside from minor damage caused by debris from the crashed drones, no military or other infrastructure was damaged.March 14th - As of 2:30 PM closing, the Shanghai Gold futures contract fell 1.31% to 1127 yuan/gram, the Shanghai Silver futures contract fell 4.59% to 20682 yuan/kilogram, and the SC Crude Oil futures contract rose 4.47% to 787 yuan/barrel.March 14th - As Middle Eastern crude oil supplies are stuck in the Persian Gulf, Asian refiners are scrambling for alternatives, and a Thai refiner has made a rare move by purchasing Forties crude oil from Trafigura. A trader familiar with the matter revealed that Trafigura sold a shipment of approximately 700,000 barrels of crude oil, with loading scheduled for late March. This marks the first time a Thai company has purchased North Sea crude oil since Bloomberg began tracking the data in 2019. Sources indicated that the cargo will be transported to Thailand via an Aframax tanker, which typically carries 600,000 to 700,000 barrels of crude oil. North Sea crude oil is usually transported to Asia on supertankers, but record freight rates have reduced the economic viability of large tankers.

Oil costs increase as supply restrictions trump economic worries

Charlie Brooks

Jul 05, 2022 11:12


Oil prices climbed on Monday as supply worries spurred by a decrease in OPEC production, unrest in Libya, and sanctions against Russia trumped fears of a worldwide recession that would diminish demand.


In June, Euro zone inflation hit an all-time high, boosting the case for rapid rate rises by the European Central Bank, while consumer sentiment in the United States reached an all-time low.


Brent oil rose $2.26, or 2%, to $113.89 a barrel as of 12:47 p.m. ET (1648 GMT), after shedding more than $1 in early trading. The price of U.S. West Texas Intermediate (WTI) crude rose $2.20, or 2%, to $110.63 despite the lack of trading activity over the Fourth of July holiday.


According to a Reuters survey, the Organization of the Petroleum Exporting Countries (OPEC) failed to meet its June goal of increasing production.


Thursday, authorities in OPEC member Libya declared force majeure at the Es Sidr and Ras Lanuf ports and the El Feel oilfield, claiming a reduction of 865,000 barrels per day in oil output (bpd).


Meanwhile, more than two weeks of unrest have caused Ecuador to lose almost 2 million barrels of production, according to Petroecuador, the country's state-owned oil company.


This week, a strike in Norway may restrict supply from the biggest oil producer in Western Europe and reduce overall petroleum production by 8 percent.


"This background of rising supply interruptions clashes with a probable shortage of spare production capacity among Middle Eastern oil producers," said Stephen Brennock of oil trader PVM, referring to the producers' limited ability to pump more oil.


And prices will climb if new oil production does not reach the market shortly.


On Monday, British Prime Minister Boris Johnson asked OPEC+ to raise oil output to tackle the growing cost of living.


As a consequence of Russia's invasion of Ukraine, supply concerns have sent Brent oil prices close to 2008's record high of $147 a barrel.


As a consequence of restrictions on Russian oil and limited gas supplies, surging energy prices have driven inflation in certain countries to multi-decade highs and stoked fears of a recession.


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