The price of North Sea Brent crude oil at 3:30 AM GMT on Tuesday increased by 27 cents, or 0.3%, to $100.59 per barrel. Meanwhile, U.S. WTI crude oil traded at $89.73 per barrel, up 30 cents or 0.3%.
Impact of Middle Eastern Tensions
Despite the G7 countries' decision to draw from strategic reserves, the assessment of Middle Eastern tensions by traders and security concerns in the region have maintained geopolitical risk premiums in the market, leading to an increase in oil prices. These developments reflect the direct impact of political conditions on global oil prices.
Read more: Kuwait Restores Oil Production to 2 Million Barrels per Day
Supply and Demand Situation
Priyanka Sachdeva, head of market outlook at Phillip Nova, stated that supply conditions have not yet returned to normal. Costs, insurance, routing, and security risks for transporting shipments remain high. On Friday, G7 countries agreed to withdraw 100 million barrels of diesel and crude oil from strategic reserves to alleviate supply concerns and committed to avoiding restrictions on their energy exports.
Vivek Dar, an analyst at Commonwealth Bank of Australia, pointed to other factors affecting the market, saying, "The reduction in oil inventories has made market participants doubtful about the continuation of price declines." Additionally, shipping costs from the Gulf to Asia have increased unprecedentedly, indicating tightness and high demand in the shipping market.
This situation emphasizes that the oil supply chain has little resilience against any disruptions, and market participants must closely monitor conditions. These developments are expected to impact global oil prices and the economic situation of countries dependent on this industry.
Read more: Official Accounts of Hamid Bord, Acting Minister of Oil, Announced · Saudi Arabia Reduced Asia's Crude Oil Prices and Increased Europe's Rates
