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Mint
16-06-2025
- Business
- Mint
Oil prices above $75/bbl as Israel-Iran conflict intensifies
New Delhi: Crude oil prices edged higher early Monday as tensions escalated between Israel and Iran, with both countries targeting each other's key energy infrastructure. Over the weekend, Israel launched airstrikes on several oil and gas fields in Iran, including South Pars, one of the world's largest natural gas reserves. Despite the intensity of the attacks, reports indicated that there has been no immediate disruption to energy supplies. Meanwhile, Iranian missile strikes on northern Israel reportedly caused localized damage to pipelines and transmission lines in the Bazan oil refinery complex near Haifa. While refining operations continue, other functions at the facility have been suspended, according to reports. At 0755am, IST, the August contract of Brent crude on the Intercontinental Exchange was trading at $75.14 per barrel, up 1.24% from previous close. Immediately after Israel attacked Iran, oil prices shot up on Friday. Brent Crude, the global benchmark, had surged 8% to $74 per barrel. Traders remain wary of further escalation, particularly any threat to the Strait of Hormuz—a critical chokepoint through which nearly 20% of the world's oil supply is transported. S&P Global Commodity Insights said Israel's surprise airstrikes on Iranian nuclear sites have jolted global energy markets, sending oil prices higher and fuelling fears of broader regional instability. While the conflict is driving up oil and gas prices in the short term, S&P noted that sustained pressure is unlikely unless crude exports are directly impacted. 'If Iranian crude exports are disrupted, Chinese refiners—the primary buyers of Iranian oil—would be forced to seek alternatives from other Middle Eastern suppliers and Russia,' said Richard Joswick, head of near-term oil analysis at S&P Global. 'This could also lift freight rates and tanker insurance premiums, narrow the Brent-Dubai spread, and hurt refining margins, especially in Asia.' According to the Platts OPEC Survey, Iran produced 3.25 million barrels per day (b/d) of crude in May. It also has around 2.2 million b/d of refining capacity and 600,000 b/d of condensate splitting capacity. However, crude exports slipped below 1.5 million b/d last month as floating storage levels rose amid rising geopolitical tensions. India, which imports over 85% of its crude oil, does not purchase Iranian oil due to US sanctions. Nonetheless, any global supply disruption and price surge increases India's import bill, putting pressure on the rupee and trade balance. JP Morgan recently projected that crude oil prices could surge to $120–130 per barrel if the conflict worsens. 'If prices climb to $120 per barrel, there will be pressure on the forex front and the trade balance due to a higher import bill. However, inflation may not be immediately impacted, as domestic fuel prices are unlikely to be raised in the short term, having remained static even during earlier price dips,' Madan Sabnavis, chief economist at Bank of Baroda, had told Mint earlier.
Sydney Morning Herald
15-06-2025
- Business
- Sydney Morning Herald
ASX set to slide, Middle East attacks trigger Wall Street slump; Oil prices surge
Oil prices leaped, and Wall Street stocks slumped on Friday on worries that escalating violence following Israel's attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global economy. The S&P 500 sank 1.1 per cent and wiped out what had been a modest gain for the week. The Dow Jones Industrial Average dropped 769 points, or 1.8 per cent, and the Nasdaq composite lost 1.3 per cent. The Australian sharemarket is set to retreat, with futures on Saturday pointing to a loss of 23 points, or 0.3 per cent, at the open. The Australian dollar retreated. It was fetching 64.85 US cents at 5.21am AEST. The strongest action was in the oil market, where the price of a barrel of benchmark US crude jumped 7.3 per cent to $US72.98. Brent crude, the international standard, rose 7 per cent to $US74.23 for a barrel. Iran is one of the world's major producers of oil, though sanctions by Western countries have limited its sales. If a wider war erupts, it could slow the flow of Iran's oil to its customers and keep the price of crude and petrol higher for everyone worldwide. Beyond the oil coming from Iran, analysts also pointed to the potential for disruptions in the Strait of Hormuz, a relatively narrow waterway off Iran's coast. Much of the world's oil that's been pulled from the ground moves through it on ships. Loading Past attacks involving Iran and Israel have seen prices for oil spike initially, only to fall later 'once it became clear that the situation was not escalating and there was no impact on oil supply,' according to Richard Joswick, head of near-term oil at S&P Global Commodity Insights. That has Wall Street waiting to see what will come next. US stock prices dropped to their lowest points for the day after Iran launched ballistic missiles toward Israel.
The Age
15-06-2025
- Business
- The Age
ASX set to slide, Middle East attacks trigger Wall Street slump; Oil prices surge
Oil prices leaped, and Wall Street stocks slumped on Friday on worries that escalating violence following Israel's attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global economy. The S&P 500 sank 1.1 per cent and wiped out what had been a modest gain for the week. The Dow Jones Industrial Average dropped 769 points, or 1.8 per cent, and the Nasdaq composite lost 1.3 per cent. The Australian sharemarket is set to retreat, with futures on Saturday pointing to a loss of 23 points, or 0.3 per cent, at the open. The Australian dollar retreated. It was fetching 64.85 US cents at 5.21am AEST. The strongest action was in the oil market, where the price of a barrel of benchmark US crude jumped 7.3 per cent to $US72.98. Brent crude, the international standard, rose 7 per cent to $US74.23 for a barrel. Iran is one of the world's major producers of oil, though sanctions by Western countries have limited its sales. If a wider war erupts, it could slow the flow of Iran's oil to its customers and keep the price of crude and petrol higher for everyone worldwide. Beyond the oil coming from Iran, analysts also pointed to the potential for disruptions in the Strait of Hormuz, a relatively narrow waterway off Iran's coast. Much of the world's oil that's been pulled from the ground moves through it on ships. Loading Past attacks involving Iran and Israel have seen prices for oil spike initially, only to fall later 'once it became clear that the situation was not escalating and there was no impact on oil supply,' according to Richard Joswick, head of near-term oil at S&P Global Commodity Insights. That has Wall Street waiting to see what will come next. US stock prices dropped to their lowest points for the day after Iran launched ballistic missiles toward Israel.
Al Etihad
15-06-2025
- Business
- Al Etihad
Iran-Israel tensions: Analysts optimistic about stability of oil supplies
15 June 2025 16:56 A. SREENIVASA REDDY (ABU DHABI)Most analysts remain optimistic about the stability of crude prices and the continuity of global oil shipments, especially through the Strait of Hormuz, despite escalating tensions between Iran and the conflict has fuelled market speculation, most industry analysts and trade experts continue to express confidence in the resilience of global energy trade. Their view is anchored in historical precedent, economic pragmatism, and the deeply interwoven trade relationships that characterise the Arabian Gulf Strait of Hormuz — a narrow but critical maritime corridor at the mouth of the Arabian Gulf — handles close to 30% of the world's crude and refined petroleum exports and around 20% of global LNG flows. A complete closure would undoubtedly shake global energy markets. However, most observers consider such an outcome unlikely. "While we don't yet foresee a war escalating to a Hormuz blockade, its closure would severely impact global energy flows," a Chinese oil trader told S&P Global. But despite rising tensions and military strikes between Israel and Iran, there has been no significant disruption to commercial shipping so far. Historical confrontations between the two countries have also avoided this red a note issued on June 13, JP Morgan analysts assessed the risk of Iran closing the Strait as 'very low', citing Iran's reluctance to damage its economic lifeline — especially its vital trade relationship with to S&P Global Commodity Insights, Iran pumped 3.24 million barrels per day (b/d) in May, most of which is exported to China. Any move to restrict traffic through Hormuz would not only sever this economic artery but also affect its ability to send supplies to initially reacted with concern. ICE Brent crude futures spiked 8.97% on June 13 — the sharpest single-day gain in five years. But analysts at S&P Global and Goldman Sachs expect such price volatility to be temporary, barring direct attacks on energy infrastructure. 'We've seen these spikes before. Prices jump, then retreat when it's clear that oil flows are not actually impacted,' said Richard Joswick, Head of Near-Term Oil Analysis at S&P this outlook is the presence of alternative logistics. The UAE's Habshan–Fujairah pipeline, for instance, enables crude to bypass Hormuz altogether. Long-term LNG supply contracts between China and exporters like Qatar and the UAE also offer stability and reduce reliance on spot risk insurance premiums in the Arabian Gulf, which cover ships navigating high-risk zones, remain steady at 0.05%–0.07% of vessel hull value — unchanged for 18 months. Though freight charges could rise if hostilities deepen, there is no current indication of a shipping refiners are the largest buyers of Gulf crude. 'Extreme actions could provoke responses from Asian military powers. So both Iran and Israel are likely to exercise caution,' said a Tokyo-based feedstock manager. Refiners in South Korea, Japan, and Thailand have echoed similar sentiments, underscoring confidence that the Strait of Hormuz will stay Goldman Sachs, while adjusting its geopolitical risk premium, predicts Brent crude to fall back to the $60s in 2026, assuming no long-term infrastructure damage and a compensatory output from OPEC+.In a potential escalation scenario, Goldman estimates a temporary loss of 1.75 million b/d from Iran if its export infrastructure is damaged — but believes this shortfall could be partially offset by OPEC+ spare capacity. Under such conditions, Brent could peak over $90/b, before normalising as supply recovers.S&P Global concurs that the real inflection point would be a direct disruption to exports. 'Unless exports are impacted, the price upside will fade,' its analysts noted. Joswick reinforced this by citing 2024, when similar flare-ups triggered short-term price movements that quickly reversed once it became clear supply was Pollack, vice president for policy at the Middle East Institute, noted: 'If Iran closed the Strait of Hormuz, the US would come in with all guns blazing.' Analysts warn that such a move would not only provoke military responses but would be viewed by Gulf neighbours as a direct economic threat.'There is no doubt the situation in the Arabian Gulf is very tense. We have reports that more shipowners are now exercising extra caution and are opting to stay away from the Red Sea and the Arabian Gulf,' said Jakob P Larsen, Chief Safety & Security Officer at BIMCO, the world's largest international shipping association.'There is currently no indication that Iran will seek to disrupt shipping in the Gulf, and no indication at this point that the Houthis will seek to disrupt shipping in the Red Sea. The tripwire will be the perception of the US' involvement. If the US is suddenly perceived to be involved in attacks, the risk of escalation increases significantly,' Larsen told Aletihad.'BIMCO encourages shipowners to follow developments closely and implement ship defence measures according to the industry guidance document,' he added. Meanwhile, broader OPEC+ dynamics are also at play. Eight OPEC+ member states are moving to restore 2.2 million b/d of curtailed output to regain their market share. 'We'll likely see more unwinding of voluntary cuts,' said Harry Tchiliguirian, Head of Research at Onyx Capital Advisory. This will likely have a mitigating impact on oil prices.
Time of India
15-06-2025
- Business
- Time of India
Oil jumps to $75.19/b after Israeli strikes on Iran, Israeli gas exports to Egypt and Jordan suspended
New Delhi: Israel's airstrikes on Iranian nuclear sites have pushed Brent crude oil prices to a two-month high of $75.19 per barrel and disrupted regional natural gas exports , raising concerns over energy market volatility and potential supply disruption. According to S&P Global Commodity Insights, Dated Brent rose sharply on June 13, recording the biggest single-day gain in nearly five years. Middle East sour crudes also saw significant movement, with Platts assessing front-month cash Dubai at $72.50/b, a 5.7 per cent increase from the previous day. Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, said, 'The attack is obviously bullish near term for oil prices, but the key is whether oil exports will be affected. When Iran and Israel exchanged attacks last time, prices spiked, then fell once it was clear the situation wasn't escalating and oil supply was unaffected.' Iran produced 3.25 million barrels per day (b/d) of crude in May, according to the Platts OPEC Survey. It also holds around 2.2 million b/d of refining capacity and 600,000 b/d of condensate splitting capacity. However, its exports dipped below 1.5 million b/d in May amid rising tensions and an increase in floating storage levels. 'If Iranian crude exports are disrupted, Chinese refiners, the sole buyers of Iranian barrels, would need to seek alternative grades from other Middle Eastern countries and Russian crudes,' Joswick said. 'This could also boost freight rates and tanker insurance premiums, narrow the Brent-Dubai spread, and hurt refinery margins, particularly in Asia.' Gas production suspensions affect regional supplies Israel's Ministry of Energy confirmed temporary shutdowns at the Leviathan and Karish gas platforms. These facilities account for around 1.8 billion cubic feet per day (Bcf/d) of production and supply 1.2 Bcf/d of pipeline gas exports to Egypt and Jordan, all of which have been suspended. Laurent Ruseckas, Executive Director at S&P Global Commodity Insights, said, 'The shutdowns are bullish for LNG prices, initially on sentiment, and possibly more if they persist. Egypt and Jordan will need to replace Israeli imports, and that could quickly build demand for LNG cargoes.' Egypt's floating storage and regasification unit (FSRU), Hoegh Galleon at Ain Sokhna, is already operating at full capacity. Two other FSRUs—Energos Eskimo and Energos Power—are offline for maintenance. Ruseckas stated that if the additional units are not brought online swiftly, Egypt and Jordan may have to use fuel oil or enforce gas rationing. 'To fully replace Israeli pipeline imports, Egypt and Jordan would require another 10–12 LNG cargoes per month,' he added. Geopolitical concerns and shipping disruption risks Analysts from S&P Global Commodity Insights noted that the Strait of Hormuz, through which nearly 20 per cent of global LNG trade passes, remains a critical vulnerability. Any potential retaliation from Iran involving maritime routes could impact global energy flows. 'There is a risk to LNG supply if Iran retaliates by threatening shipping through the Strait of Hormuz,' the analysts stated. Platts tanker tracking data shows Red Sea commercial transits have already declined by 60 per cent since late 2023 due to Houthi-related disruptions. Although freight rates for Red Sea routes have remained stable, an escalation could reverse the trend. Joswick said, 'The longer-term impact on oil and gas markets will depend on whether the conflict escalates into a regional war or remains contained. Price risk premiums tend to fade unless actual supply is disrupted.' Markets continue to monitor developments closely as tensions in the Middle East affect energy trade flows and pricing dynamics.
