Oil Market Defies Sanctions Fears as Prices Surge on Shrinking Iranian Crude
The oil market is experiencing its second consecutive weekly gain, with Brent up more than 4% and WTI up over 5%. The surge in prices comes despite a lack of new developments in the conflict between Iran and the US.
In fact, Treasury Secretary Mnuchin's sanctions against Iran are due to come into effect on Monday, which could further tighten global supply. However, markets seem to be pricing in a disruption that is already occurring rather than one that might happen.
The Strait of Hormuz, a key shipping route, has seen traffic drop to just seven ships. Iranian crude oil is becoming scarcer in Asia, and floating storage facilities are being drained at an alarming rate.
Chinese refiners are struggling to find replacement barrels, which could exacerbate the supply crunch. With tensions between Iran and the US showing no signs of easing, the oil market's resilience is a testament to its ability to withstand ongoing uncertainty.