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Express Tribune
4 days ago
- Business
- Express Tribune
Oil steadies on reports of OPEC+ August output hike
Oil prices edged up slightly on Friday, recovering from a midday drop into negative territory following a report that OPEC+ was planning to hike production in August, but tumbled about 12% in the week in their biggest drop since March 2023. Brent crude futures settled at $67.77 a barrel, up 4 cents, or 0.1%. US West Texas Intermediate crude finished up 28 cents, or 0.4%, at $65.52 a barrel. Four delegates from OPEC+, which includes allies of the Organisation of the Petroleum Exporting Countries, said the group was set to boost production by 411,000 barrels per day in August, following a similar-size output increase already planned for July. Crude prices were already headed for a 12% decline for the week following the cease-fire between Israel and Iran. During the 12-day war, Brent prices rose briefly to above $80 a barrel before slumping to $67 a barrel after Trump announced the ceasefire.
Yahoo
24-06-2025
- Business
- Yahoo
How will your household costs be affected by conflict in the Middle East?
Donald Trump's decision for the US to bomb Iran has seen fears of a crisis in the Middle East deepen, with the world braced for a counter attack from Tehran. In one retaliatory move, the country has already voted to shut down a key shipping route, the Strait of Hormuz, prompting warnings of another spike in oil prices. The price of oil has been on the rise over the past three weeks – amid Israel strikes on Iran's nuclear sites – but there are concerns it could rocket even further, with one expert warning of a possible 40 per cent increase. As well as the effect on the price of gas and petrol, any move from Iran to close the shipping route could also affect the likes of transport, production and inflation domestically. When talking about the price of oil, what we're typically looking at in the UK is Brent Crude, which relates to oil from the North Sea and is a worldwide benchmark of future prices of oil across most markets. There are others, such as WTI, but Brent is typically the focus. Brent was above $122 per barrel in 2022, a result of the Russian invasion of Ukraine which resulted in far higher energy costs, while the price was as low as $25 in mid-2020 when the Covid lockdown meant demand was incredibly low. Right now, it's just under $78. Like any market, a commodity like oil is primarily subject to supply and demand. Too much supply will lower prices so businesses buy it up; if there's more demand, prices can increase accordingly. But oil is subject to many other factors. Opec (the Organisation of the Petroleum Exporting Countries) can decide supply by setting quotas on barrels produced, while weather conditions can also affect production. The various costs of doing business in different parts of the world can also impact the supply line. Israel sent rockets into Iran on June 13, before President Trump demanded 'not a ceasefire, a real end' to the conflict. Following that, the US fired their own missiles into Iran across the weekend, hitting nuclear facilities and prompting the Asian nation to threaten retaliation. While the attacks centre around Iran's nuclear production, oil prices are impacted because that nation controls the Strait of Hormuz, a key shipping route for around 20m barrels a day, as well as producing more than 1.5m barrels of oil a day themselves. Should Iran opt to close the Strait due to escalated warfare, the restriction of oil supply would therefore be expected to see prices rise further - but so far markets aren't necessarily predicting that. 'Oil and gas prices are staying very calm, all things considered, and the gains in the immediate aftermath of the American bombings in Iran are perhaps more muted that you might have expected,' said Russ Mould, investment director at AJ Bell. Mr Mould suggested factors such as political interventions or Iran's lack of response so far may be a reason for that. Goldman Sachs has warned the price of Brent could rise to $100 and even peak at $110 if the Strait was closed and flows were cut by half for a month, then remained lower than usual for the rest of the year. Perhaps significantly, the investment bank analysts rate the chances of a closure of the Strait at 52 per cent at present. The immediate link is of course regarding the price of fuel for vehicles, but that's not the only factor at play. 'Where oil and gas go, petrol and energy prices may follow, but regulators and consumers are watching and it may take a period of sustained strength or weakness for the forecourts to show big changes,' explained Mr Mould. 'There's generally about a 4 week gap between movements in oil prices and petrol prices – the chart below illustrates this quite well,' Thomas Pugh, chief economist from RSM UK told The Independent. Over the past month, Brent oil has risen from the mid-60s to its current price point - a rise of more than 18 per cent. As noted earlier, the spike seen in 2022 contributed enormously to rising energy bills. It's not just that higher oil (and gas) means higher bills for those commodities when businesses or households eventually use them, but also that it in turn means higher transport costs and production costs. All this is a contribution to rising inflation. Mr Mould noted that 'Israel's first missile strike on Iran 10 days ago will already have had some inflationary impact,' which in UK terms will be seen as another blow to efforts to get the economy growing. 'If oil and natural gas prices stay where they are currently, that will add about 0.1 percentage point to inflation in Q3,' predicted Mr Pugh. 'In terms of overall inflation impact, the rule of thumb is that a $10 per barrel rise in oil prices nudges up inflation by about 0.1ppt in the short term and closer to 0.2ppt in the long term, once the impact has filtered through the supply chain.' With UK inflation at 3.4 per cent last month, the danger now is that these external factors mean domestic inflation faces another threat, which in turn might force interest rates to remain higher for even longer than expected - in turn again slowing economic growth efforts. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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First Post
24-06-2025
- Business
- First Post
India increases oil imports from Russia, US: Is New Delhi reducing dependence on West Asia?
Amid turbulence in West Asia, India is looking to reduce its dependence on oil from the region. Though crude prices dropped today amid the announced ceasefire between Israel and Iran, oil prices spiked after the conflict began. But where is New Delhi, which is the third largest consumer of crude oil in the world and one of the biggest importers, looking to fulfil its requirements? read more New Delhi is the third largest consumer of crude oil in the world and one of the biggest importers India is looking at to reduce its dependence on oil from West Asia. This comes amid the conflict between Israel and Iran. Though oil prices have dropped today amid the ceasefire kicking in, oil prices had initially spiked after Israel conducted airstrikes on Iran. Israel had previously attacked Iran's oil and gas infrastructure including the South Pars gas field i t jointly owns with Qatar. But how is India looking at alternative places to get oil? STORY CONTINUES BELOW THIS AD Let's take a closer look Oil prices surged after Israel's airstrikes First, let's briefly look at how oil prices had spiked in the wake of Israel's attack on Iran. Oil prices had spiked 14 per cent after Israel attacked Iran on June 13. The price of oil eventually settled seven per cent higher at $73 (Rs 6,200) per barrel. Experts had worried that strikes on Iran – the third-largest producer of crude oil within Organisation of the Petroleum Exporting Countries (Opec) – could disrupt flow of crude oil to the rest of the world particularly Asia. They warned that oil could trade as high as $80 (Rs 6,882) per barrel if Iran followed through on its threat to shut the Strait of Hormuz – a narrow channel between Iran and Oman that nearly a fifth of global oil passes through on its way around the world. However, that didn't happen. Instead, crude oil hit as high as $77.08 (Rs 6,631) per barrel on Thursday before prices began sliding downwards. Even as Iran hit a US base in Qatar on Tuesday, oil prices were at $69.48 (Rs 5,977) per barrel. The Strait of Hormuz is a narrow waterway wedged between Iran and Oman. It is considered a major global oil choke point. Experts warn that shutting it down could have serious consequences. Reuters Now, Trump has announced a 'complete and total' ceasefire between the two nations for which he has credited Qatar. While Iran's foreign minister Seyed Abbas Araghchi initially denied reports of a ceasefire, the country has since admi tted it has no intention of continuing its attacks on Israel. India, meanwhile, isn't wasting time. STORY CONTINUES BELOW THIS AD New Delhi, the third largest consumer of crude oil in the world and one of the biggest importers, is already eyeing alternative sources to meet its crude oil requirements. India examining alternative sources for oil India already imports oil from Russia, Saudi Arabia, Iraq and the UAE. New Delhi has made a concerted effort in recent months to increase its purchases of crude oil from Moscow. Russian crude comprised around 39 per cent of India's oil imports in April and May. In May, India purchased 1.96 million barrels of crude oil from Russia every day. India's oil imports from Russia are already more than its combined purchases from Iraq and Saudi Arabia. Russia sends its crude oil to India via the Suez Canal, Red Sea route, the Cape of Good Hope and the Pacific Ocean. India has saved billions of dollars by purchasing Russian crude oil – which is facing sanctions from the West – in the last financial year. Reuters Exporters in June are expected to purchase around 2.2 million barrels of crude oil per day from Russia in June. India will likely increase its purchases from Russia even more in July if the turmoil in West Asia continues. Sumit Ritolia, Lead Research Analyst, Refining & Modeling, at Kpler, told _Indian Expres_s, 'June reinforces a well-established precedent – Russian crude volumes…continue to dominate India's import slate due to attractive pricing, logistics detached from the Gulf, and payment flexibility in non-dollar currencies. Looking ahead, if geopolitical risks worsen or maritime security around Hormuz deteriorates, Indian refiners are expected to ramp up spot purchases from Russia, West Africa, Latin America, and the US. This will likely translate into a decline in July nominations for Middle Eastern cargoes, particularly from Iraq and Saudi Arabia.' STORY CONTINUES BELOW THIS AD India prior to the Ukraine war imported just two per cent of its crude oil from Russia. By 2024, New Delhi had imported around 36 per cent of its crude oil from Moscow. This, even as it reduced its dependence on Saudi Arabia, the UAE and Kuwait. India has also saved billions of dollars by purchasing Russian crude oil – which is facing sanctions from the West – in the last financial year. Russia was offering India a hefty $30 discount on crude oil in 2022 when the war began. That discount was at $5 per barrel on its crude oil in 2024. India has other options too including the United States, Nigeria, Angola and Brazil. India in June bought around 439,000 barrels per day from the United States. That figure was at just 280,000 barrels per day in May. As Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler, said, 'If conflict deepens or there is any short-term disruption in Hormuz, Russian barrels will rise in share, offering both physical availability and pricing relief. India may pivot harder toward the US, Nigeria, Angola, and Brazil, albeit at higher freight costs.' STORY CONTINUES BELOW THIS AD With inputs from agencies
Libya Review
23-06-2025
- Business
- Libya Review
Libya to Benefit from Global Oil Price Surge
The head of Libya's General Union of Oil Workers, Salem Al-Rumaih, has forecast a significant rise in the country's oil revenues if regional tensions continue to push crude prices above the $100-per-barrel mark. Speaking to local media, Al-Rumaih noted that ongoing instability in the Middle East could lead to a sustained increase in Brent crude prices. He stated, 'If current geopolitical tensions persist, we may see Brent surpass $100 soon.' Such a development, he added, would have a positive impact on Libya's state finances, with oil being the country's primary source of income. 'Higher oil prices will directly translate into improved revenue streams for Libya, supporting both economic recovery and financial stability,' Al-Rumaih said. He further projected that Libya's oil revenues could exceed $20 billion in the remaining months of the year, provided prices stay above the $100 threshold. This would represent a considerable boost to the national economy, which continues to grapple with the effects of years of conflict and political fragmentation. Libya, a member of the Organisation of the Petroleum Exporting Countries (OPEC), has struggled with production disruptions in recent years. However, the country has recently stabilised its output at around 1.2 million barrels per day. The union chief also urged the government and relevant institutions to prepare for the potential windfall by ensuring transparency and prudent fiscal management. He called for reinvestment in infrastructure, timely salary payments, and improvements in workers' conditions within the oil sector. As global markets react to the evolving situation in the Middle East, Libya could find itself in a favourable position, provided it maintains production levels and capitalises on high prices. Tags: BrentCrude OilIranlibyaoil
India Today
23-06-2025
- General
- India Today
The Strait of Hormuz: What it is and why it matters to global trade
The Strait of Hormuz is one of the most important and strategic waterways in the world. It is a narrow passage of water located between the southern coast of Iran and the northern coast of Oman and the United Arab Emirates. This strait connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, providing the only sea route for oil tankers and ships carrying natural gas from the oil-rich countries surrounding the Persian Gulf to the rest of the its strategic location and enormous volume of oil and gas that transits through it daily, the Strait of Hormuz affects global trade and energy security. Threats to block or close the strait can significantly restrict global oil supplies, raise energy prices, and hurt economies around the IS THE STRAIT OF HORMUZ?The Strait of Hormuz, situated geographically and strategically between Oman and Iran, connects the North Gulf with the Gulf of Oman and the Arabian Sea further south. The Strait, thanks to its geographical location, serves as the only sea passage from the Persian Gulf to the open ocean. It is for this reason that the Strait of Hormuz is considered to be one of the world's most strategically important "choke points". The Strait is the primary export route for Gulf producers, including Saudi Arabia, the United Arab Emirates, Iraq, as well as is 33 kilometres wide at the narrowest point, while the shipping lane is only 3 km OF THE NAMEThe link to the Persian Gulf was described as early as the first century, in the Peri-pus of the Erythraean Sea, but the description did not name the opening. During the 11th to 17th centuries AD, the eastern side of the Persian Gulf was occupied by the Kingdom of Ormus, and scholars think the strait may be based on the name of the kingdom."Ormus" is of Persian origin and derives from the word "Hur-mogh," which means "date palm." The Hurmoz and Minab tribes still call the strait "Hurmogh".WHY IS IT SO IMPORTANT?The Strait allows roughly 20 per cent of the world's daily oil consumption, which is around 20 million barrels, to pass through it. Between January 2022 and August 2023, about 17.8m to 20.8m barrels of crude, condensate and fuels were passing through the Strait each day, according to data from Vortexa, an analytics of the members of the Organisation of the Petroleum Exporting Countries (OPEC) - Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq - ship most of their crude through the strait, most commonly to it has also been at the heart of regional tensions for years now and the problem seems to have escalated after the United States strike on three key nuclear facilities in Iran on June 21, which has put the spotlight back on the Strait of Hormuz. Iran has long threatened to choke the Strait and may act upon it if matters come to OF DISRUPTIONThe closure of the Strait is likely to trigger an oil price spike that would have an almost immediate inflationary impact in the US and in many countries globally, including India. However, experts say this course of action by Iran would lead to dramatic economic self-harm. Iranian oil uses the same choke point, and closing Hormuz risks drawing GCC Arab allies into the war to defend their is also said that the closure of the Strait would impact China significantly. The second-largest economy in the world purchases nearly 90% of Iranian oil-export revenues, which are secluded because most other countries do not agree to abide by sanctions imposed by the Chinese Strait of Hormuz continues to be an important geopolitical and economic area, with implications for global oil markets. It will be critical over the coming years that international diplomacy continues for all stakeholders, as this will affect energy security and global economic those who have studied West Asia and its global ramifications, any disruption in the Strait of Hormuz could affect consumer fuel prices and global economic recovery. For that reason, it is vital that stakeholders closely monitor developments as the Strait of Hormuz plays a significant role in international InMust Watch
