Oil Prices Surge as US-Iran Conflict Escalates

The recent military strikes between the US and Iran have sent oil prices rallying, as concerns about disruptions to energy flows from the Persian Gulf increase. The US struck Iranian launchers over the weekend, prompting a retaliatory strike by Iran. This has led to fears of a prolonged stalemate in the region, which could impact global oil supplies.

The latest positioning data shows that speculators reduced their net long position in ICE Brent by 28,299 lots to 223,598 lots as of last Tuesday, driven mainly by longs liquidating. This move was prompted by growing hopes for a resumption of talks between the US and Iran, as well as increasing oil flows from the Persian Gulf.

Russia has extended its ban on diesel exports until the end of September 2026, adding to supply stress in the global diesel market. The market is expected to face strong demand over the next couple of months due to harvesting in the Northern Hemisphere and planting in the Southern Hemisphere. European gas prices are also stronger in early morning trading, following this weekend's strikes in the Persian Gulf.