Oil Prices Surge Amid Escalating US-Iran Tensions
US-Iran tensions have pushed oil prices higher as the situation in the Middle East becomes increasingly volatile. Iran has declared that it will adopt a 'fully offensive' strategy against the US, following the breakdown of ceasefire negotiations. This escalation has led to increased uncertainty and speculation about potential further conflict.
The statement from an unnamed senior Tehran official warned that Iranian entities must be prepared to escalate tensions in the Strait of Hormuz and wider region. In response, President Trump threatened to bomb Gulf ally Oman if it finalized its deal with Iran for joint management of the Strait of Hormuz.
Meanwhile, diesel margins have hit records, surging above $100 per barrel as refiners ramped up gasoline and jet fuel production in response to peak travel season. This has exacerbated a global supply crunch, with the International Energy Agency reporting that global refinery run rates stood at 80.9 million barrels daily, down by 5 million bpd on the year.
The impact of Ukrainian drone attacks on Russian refineries has also contributed to the shortage, particularly in diesel production. Russia has banned diesel exports until the end of the year in response.