The price of Brent oil increased in trading on Friday, rising by 44 cents to $104.72 per barrel. At the same time, West Texas Intermediate oil also rose by 36 cents to $91.85.
Factors Influencing the Oil Market
Concerns over oil supply disruptions in the Gulf of Mexico and political developments related to Iran, along with new U.S. government decisions regarding the import of Russian diesel, have been among the most significant factors affecting the energy market. The movement of Hurricane "Isaias" towards the northern part of the Gulf of Mexico has forced oil companies to halt production in U.S. waters. According to reports, oil producers had halted about 1.3 million barrels per day of oil production in this region by Thursday, which is equivalent to 62.9% of current production in the Gulf of Mexico.
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Political and Economic Developments
Developments related to Iran and increasing concerns about shipping security in the Persian Gulf and the Strait of Hormuz have led to significant volatility in the oil market. Before the war, about 20% of the world's oil and fuel passed through the Strait of Hormuz, and any disruption in this strategic route could lead to increased supply concerns.
Donald Trump, the President of the United States, announced on Thursday that constructive talks with Iran had taken place and stated that an attack is not on the agenda before the midterm congressional elections on November 3. At the same time, Trump announced that Russia has agreed to help reduce fuel prices by supplying diesel to global markets, and the U.S. government has temporarily eased restrictions on Russian diesel imports.
According to Trump's statements, Russia is set to supply more than 300,000 tons of diesel, equivalent to about 2.25 million barrels, to the U.S. market and other global markets. Additionally, the U.S. Treasury Department has issued a permit allowing Russian diesel imports until April 7.
Despite the rise in Brent and West Texas prices in trading on Friday, analysts believe that production conditions, refinery capacities, and geopolitical developments will continue to impact the market. Moreover, the resumption of China's petroleum product exports after a brief pause could exert downward pressure on the market.
Ultimately, the future trend of the market will depend on developments in Iran, the situation in the Strait of Hormuz, U.S. oil production levels, and how Russia and China's fuel supply plans are implemented.
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