November 25, 2024November 25, 2024

Oil holds at 2-week high as Russia, Iran tensions support prices

Posted By: keaton

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OIL prices hovered near two-week highs on Monday following 6 per cent gains last week, as geopolitical tensions heightened between western powers and major oil producers Russia and Iran, raising risks of supply disruption.

Brent crude futures climbed 13 cents, or 0.2 per cent, to US$75.30 a barrel by 0115 GMT, while US West Texas Intermediate crude futures were at US$71.38 a barrel, up 14 cents, or 0.2 per cent.

Both contracts last week notched their biggest weekly gains since late September to reach their highest settlement levels since Nov 7 after Russia fired a hypersonic missile at Ukraine in a warning to the United States and UK following strikes by Kyiv on Russia using US and British weapons.

“The recent exchanges indicate the war has entered a new and dangerous phase, raising concerns of disruptions to supplies,” ANZ analysts led by Daniel Hynes said in a note.

In addition, Iran reacted to a resolution passed by the UN nuclear watchdog on Thursday by ordering measures such as activating various new and advanced centrifuges used in enriching uranium.

“The IAEA censure and Iran’s response heightens the likelihood that Trump will look to enforce sanctions against Iran’s oil exports when he comes into power,” Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia said in a note.

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Enforced sanctions could sideline about 1 million barrels per day of Iran’s oil exports, about 1 per cent of global oil supply, he said.

The Iranian foreign ministry said on Sunday that it will hold talks about its disputed nuclear programme with three European powers on Nov 29.

Investors were also focused on rising crude oil demand at China and India, the world’s top and third-largest importers, respectively.

China’s crude imports rebounded in November as lower prices drew stockpiling demand while Indian refiners increased crude throughput by 3 per cent on year to 5.04 million bpd in October, buoyed by fuel exports. REUTERS

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