U.S. president Donald Trump’s optimism that a deal could still be reached with Iran rather than further conflict was apparently persuasive to oil traders on Thursday, who caused another decline in the commodity and extended West Texas Intermediate’s projected weekly losses by more than 3 percent.
Without citing any evidence, Trump claimed Tehran had agreed to terms that up until now it had firmly resisted, including “free oil” and an opening of the Strait of Hormuz; he also told media that the war was “very close to being over.”
Brent on Thursday settled above $99 as some Gulf Arab and European leaders said a peace deal would take about six month to ratify and that the U.S. and Iran’s two-week ceasefire should be extended accordingly.
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The war is “very close to being over”
U.S. president Donald Trump
Meanwhile, the U.S. Navy on Thursday expanded its operations in the Hormuz to include subjecting to boarding, search, and seizure of any Iranian-linked vessel; any vessel under sanctions from the Office of Foreign Assets Control; and any vessel suspected of carrying contraband including weapons or military electronics.
For its part, energy and chemicals consultancy FGE NextantECA calculated that Iran had about 90 million barrels’ worth of available onshore crude oil storage capacity, enough to withstand a complete stoppage of exports for two months before having to begin shutting in production.
Another calculation related to the war on Thursday was provided by the International Energy Agency: in noting that oil fields, refineries, and pipelines have sustained damage across the Persian Gulf in addition to the Hormuz squeeze, it warned that it could take up to two years to restore a meaningful share of oil and gas production.
This came on the heels of an earlier IEA report stating that as much as 13 million barrels per day (bpd) of oil production had been removed from the market due to the war.
Also on Thursday, Australia’s energy crisis worsened when a fire broke out in Viva Energy’s Corio oil refinery in Geelong, southwest of Melbourne, one of just two refineries in the entire country.
Australian energy minister Chris Bowen, who has helped maintain his country’s efforts to boost alternative energy strategies at the expense of the fossil fuels sector, said, “My message to Australians is that this is one part of the supply chain, we continue to make very good progress internationally” to procure fuel; and he followed through by warning citizens against panic-buying.
Ship & Bunker News Team
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