Oil Prices Stay Above $100 Despite G7 Supply Boost and Middle East Risks
Oil prices held steady above the $100 mark on Monday, despite a planned supply boost by G7 countries. Brent crude futures rose slightly to $102.30 a barrel, while US West Texas Intermediate (WTI) fell marginally to $90.62. The stability in prices is attributed to ongoing concerns about supply disruptions in the Middle East, particularly due to the escalating US-Israeli conflict with Iran.
The G7 has announced the release of 100 million barrels of diesel and crude oil from emergency reserves to counteract potential supply shortages. However, traders remain cautious, as the region's geopolitical tensions could still lead to significant disruptions. For instance, the Strait of Hormuz, a critical oil shipping route, has seen attacks on ships, which could tighten global supplies and drive prices higher.
Refined fuel prices have also surged, with ICE gasoil futures jumping over 4% to $1,409 a metric ton. This rise is partly due to China's decision to suspend some fuel exports, creating a tighter supply situation in the Far East. Additionally, Saudi Aramco's CEO Amin Nasser warned that global oil stockpiles could take up to two years to rebuild, further tightening the market.
Middle East tensions continue to keep a risk premium in oil prices. Analysts note that achieving a ceasefire remains difficult, and renewed fighting could lead to more attacks on energy infrastructure. The combination of the G7's supply boost and ongoing geopolitical risks has created a volatile market, with prices caught between opposing forces.