Oil Prices Surge to Near $110 Per Barrel Amid Escalating Tensions
Oil prices have surged to near $110 per barrel due to escalating tensions in the Middle East and a shutdown of Saudi Arabia's 7 million b/d East-West pipeline. The ICE Brent price reached an intraday high just below $110/bbl, with front-month futures settling over 1% higher at $105.68/bbl.
The extent of damage from the pipeline outage remains uncertain, which is expected to keep prices well supported until clarity is gained. Reports suggest the pipeline could be offline for several weeks, with Saudi oil stored in tanks at Yanbu likely to sustain exports for a few days.
Despite President Trump's comments that Iran is keen to make a deal and Russia and Ukraine have agreed to stop hitting each other's energy infrastructure, little relief has been seen in middle distillate cracks. The ICE gasoil crack remains above $80/bbl and near record levels.