The situation, in brief
SINGAPORE, March 23 (Reuters) – Oil prices were little moved on Monday as investors weighed U.S. and Iranian threats to target energy facilities that could escalate the war against the release of millions of barrels of Iranian oil at sea to global markets after Washington lifted sanctions. Brent…
SINGAPORE, March 23 (Reuters) – Oil prices were little moved on Monday as investors weighed U.S. and Iranian threats to target energy facilities that could escalate the war against the release of millions of barrels of Iranian oil at sea to global markets after Washington lifted sanctions.
Brent crude futures dropped 8 cents to $112.11 a barrel by 2324 GMT after settling at the highest since July 2022 on Friday.
U.S. West Texas Intermediate was at $98.17 a barrel, down 6 cents, after a 2.27% gain in the previous session. The spread between Brent and WTI has exceeded $14 a barrel, the widest in years.
Michael McCarthy, CEO of online trading platform Moomoo Australia, said oil prices were falling temporarily due to low liquidity and traders taking profit in the short term.
“Momentum clearly favours further upside, and a test of the recent highs near $120 is a realistic scenario this week,” he added.
U.S. President Donald Trump on Saturday threatened to “obliterate” Iran’s power plants if Tehran did not fully reopen the Strait of Hormuz within 48 hours, a significant escalation barely a day after he talked about “winding down” the war, now in its fourth week.
Iran’s Parliament Speaker Mohammad Baqer Qalibaf wrote on X that critical infrastructure and energy facilities in the Middle East could be “irreversibly destroyed” should Iranian power plants be attacked.
“It clearly means more escalation which means higher oil prices. Some are incorrectly thinking, however, that Iran may cave,” said Amrita Sen, founder of Energy Aspects. “Trump is trying to show he can out-escalate and that way ends in scorched earth for Gulf infrastructure.”
The war has damaged major energy facilities in the Gulf and brought shipping through the Strait of Hormuz – which handles about 20% of global oil and liquefied natural gas flows – close to a halt. Analysts estimated a loss of 7 million to 10 million barrels per day of oil production in the Middle East.
Iraq has declared force majeure on all oilfields developed by foreign oil companies, three energy officials said. Iraqi Oil Minister Hayan Abdel-Ghani said in a ministry statement that crude production at Basra Oil Company has been cut to 900,000 bpd from 3.3 million bpd.
To alleviate the supply crunch, Washington temporarily removed sanctions on Iranian oil at sea.
Indian refiners plan to resume buying Iranian oil while refiners elsewhere in Asia are examining such a move, traders said on Saturday. — Reuters
