Alarmist media headlines about high oil prices aside, crude trading on Monday continued to be fairly restrained despite the U.S. and Iran trading strikes over the weekend, with the latest casualty being a Saudi Aramco facility in Jizan.
After it was reported that the facility, home to a 400,000 barrel per day (bpd) refinery, was struck and damage was being assessed, Brent rose 1.5 percent to $97.73 per barrel.
West Texas Intermediate climbed 1.8 percent to $93.10.
The weekend’s hostilities included three Iranian oil tankers destroyed by the U.S military, said to be part of the Islamic republic’s shadow network that funds the Revolutionary Guard and its proxies.
Iran denounced the attacks as a war crime; it also warned South Korea of “serious consequences” following reports that it is considering sending forces to the Strait of Hormuz.
Meanwhile, Anwar Gargash, a diplomatic advisor to the president of the United Arab Emirates, vowed on Monday that “no single state” should control the Hormuz; he made the remark after Tehran said it would release a map showing a new transit route for ships under Iranian supervision.
Gargash added that the UAE was building alternative routes for its energy exports and trade to ensure they are not “held hostage” by the ongoing war.
As for Hormuz transit numbers, Kpler on Monday revealed that an average of 10 commodity ships made the passagez per day over the past 10 days, the lowest since May; this inspired Priyanka Sachdeva, head of market insights at Phillip Nova, to remark, “If tanker traffic begins to slow materially, the market could price in a much larger supply shock, and there are already signs that this is happening.”
In other oil news on Monday, media reported that Denis Alipov, Russia’s ambassador to India, said his country will remain a key supplier of crude to India despite U.S. Congress’s attempt to impose 100 percent tariffs on the biggest buyers of Russian oil and gas.
Alipov said, “Unfortunately, those who impose sanctions and tariffs have taken the path of pressure tactics instead of honest cooperation, which prevents those countries from offering a better deal to India in oil than us.”