Latest news with #Joswick
Time of India
a day ago
- Business
- Time of India
Oil jumps to $75.19/b after Israeli strikes on Iran, Israeli gas exports to Egypt and Jordan suspended
New Delhi: Israel's airstrikes on Iranian nuclear sites have pushed Brent crude oil prices to a two-month high of $75.19 per barrel and disrupted regional natural gas exports , raising concerns over energy market volatility and potential supply disruption. According to S&P Global Commodity Insights, Dated Brent rose sharply on June 13, recording the biggest single-day gain in nearly five years. Middle East sour crudes also saw significant movement, with Platts assessing front-month cash Dubai at $72.50/b, a 5.7 per cent increase from the previous day. Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, said, 'The attack is obviously bullish near term for oil prices, but the key is whether oil exports will be affected. When Iran and Israel exchanged attacks last time, prices spiked, then fell once it was clear the situation wasn't escalating and oil supply was unaffected.' Iran produced 3.25 million barrels per day (b/d) of crude in May, according to the Platts OPEC Survey. It also holds around 2.2 million b/d of refining capacity and 600,000 b/d of condensate splitting capacity. However, its exports dipped below 1.5 million b/d in May amid rising tensions and an increase in floating storage levels. 'If Iranian crude exports are disrupted, Chinese refiners, the sole buyers of Iranian barrels, would need to seek alternative grades from other Middle Eastern countries and Russian crudes,' Joswick said. 'This could also boost freight rates and tanker insurance premiums, narrow the Brent-Dubai spread, and hurt refinery margins, particularly in Asia.' Gas production suspensions affect regional supplies Israel's Ministry of Energy confirmed temporary shutdowns at the Leviathan and Karish gas platforms. These facilities account for around 1.8 billion cubic feet per day (Bcf/d) of production and supply 1.2 Bcf/d of pipeline gas exports to Egypt and Jordan, all of which have been suspended. Laurent Ruseckas, Executive Director at S&P Global Commodity Insights, said, 'The shutdowns are bullish for LNG prices, initially on sentiment, and possibly more if they persist. Egypt and Jordan will need to replace Israeli imports, and that could quickly build demand for LNG cargoes.' Egypt's floating storage and regasification unit (FSRU), Hoegh Galleon at Ain Sokhna, is already operating at full capacity. Two other FSRUs—Energos Eskimo and Energos Power—are offline for maintenance. Ruseckas stated that if the additional units are not brought online swiftly, Egypt and Jordan may have to use fuel oil or enforce gas rationing. 'To fully replace Israeli pipeline imports, Egypt and Jordan would require another 10–12 LNG cargoes per month,' he added. Geopolitical concerns and shipping disruption risks Analysts from S&P Global Commodity Insights noted that the Strait of Hormuz, through which nearly 20 per cent of global LNG trade passes, remains a critical vulnerability. Any potential retaliation from Iran involving maritime routes could impact global energy flows. 'There is a risk to LNG supply if Iran retaliates by threatening shipping through the Strait of Hormuz,' the analysts stated. Platts tanker tracking data shows Red Sea commercial transits have already declined by 60 per cent since late 2023 due to Houthi-related disruptions. Although freight rates for Red Sea routes have remained stable, an escalation could reverse the trend. Joswick said, 'The longer-term impact on oil and gas markets will depend on whether the conflict escalates into a regional war or remains contained. Price risk premiums tend to fade unless actual supply is disrupted.' Markets continue to monitor developments closely as tensions in the Middle East affect energy trade flows and pricing dynamics.
Time of India
a day ago
- Business
- Time of India
Oil jumps to $75.19/b after Israeli strikes on Iran, Israeli gas exports to Egypt and Jordan suspended
New Delhi: Israel's airstrikes on Iranian nuclear sites have pushed Brent crude oil prices to a two-month high of $75.19 per barrel and disrupted regional natural gas exports , raising concerns over energy market volatility and potential supply disruption. According to S&P Global Commodity Insights, Dated Brent rose sharply on June 13, recording the biggest single-day gain in nearly five years. Middle East sour crudes also saw significant movement, with Platts assessing front-month cash Dubai at $72.50/b, a 5.7 per cent increase from the previous day. Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, said, 'The attack is obviously bullish near term for oil prices, but the key is whether oil exports will be affected. When Iran and Israel exchanged attacks last time, prices spiked, then fell once it was clear the situation wasn't escalating and oil supply was unaffected.' Iran produced 3.25 million barrels per day (b/d) of crude in May, according to the Platts OPEC Survey. It also holds around 2.2 million b/d of refining capacity and 600,000 b/d of condensate splitting capacity. However, its exports dipped below 1.5 million b/d in May amid rising tensions and an increase in floating storage levels. 'If Iranian crude exports are disrupted, Chinese refiners, the sole buyers of Iranian barrels, would need to seek alternative grades from other Middle Eastern countries and Russian crudes,' Joswick said. 'This could also boost freight rates and tanker insurance premiums, narrow the Brent-Dubai spread, and hurt refinery margins, particularly in Asia.' Gas production suspensions affect regional supplies Israel's Ministry of Energy confirmed temporary shutdowns at the Leviathan and Karish gas platforms. These facilities account for around 1.8 billion cubic feet per day (Bcf/d) of production and supply 1.2 Bcf/d of pipeline gas exports to Egypt and Jordan, all of which have been suspended. Laurent Ruseckas, Executive Director at S&P Global Commodity Insights, said, 'The shutdowns are bullish for LNG prices, initially on sentiment, and possibly more if they persist. Egypt and Jordan will need to replace Israeli imports, and that could quickly build demand for LNG cargoes.' Egypt's floating storage and regasification unit (FSRU), Hoegh Galleon at Ain Sokhna, is already operating at full capacity. Two other FSRUs—Energos Eskimo and Energos Power—are offline for maintenance. Ruseckas stated that if the additional units are not brought online swiftly, Egypt and Jordan may have to use fuel oil or enforce gas rationing. 'To fully replace Israeli pipeline imports, Egypt and Jordan would require another 10–12 LNG cargoes per month,' he added. Geopolitical concerns and shipping disruption risks Analysts from S&P Global Commodity Insights noted that the Strait of Hormuz, through which nearly 20 per cent of global LNG trade passes, remains a critical vulnerability. Any potential retaliation from Iran involving maritime routes could impact global energy flows. 'There is a risk to LNG supply if Iran retaliates by threatening shipping through the Strait of Hormuz,' the analysts stated. Platts tanker tracking data shows Red Sea commercial transits have already declined by 60 per cent since late 2023 due to Houthi-related disruptions. Although freight rates for Red Sea routes have remained stable, an escalation could reverse the trend. Joswick said, 'The longer-term impact on oil and gas markets will depend on whether the conflict escalates into a regional war or remains contained. Price risk premiums tend to fade unless actual supply is disrupted.' Markets continue to monitor developments closely as tensions in the Middle East affect energy trade flows and pricing dynamics.
3 days ago
- Business
Israel-Iran conflict expected to hike US gas prices, experts say. Here's how much.
Oil prices soared on Friday as Israel and Iran exchanged attacks, making it all but certain that gasoline prices would rise for U.S. drivers within days, industry analysts told ABC News. The back-and-forth strikes stoked concern among investors about a possible wider conflict across the Middle East, which accounts for a large share of global oil production. The U.S. West Texas Intermediate futures price -- a key measure of U.S. oil prices -- surged more than 8% on Friday. Brent crude future prices, another top measure of oil prices, also climbed more than 8%. The jump in oil prices threatens to raise the price of gasoline for U.S. drivers, since crude oil makes up the top ingredient in car fuel. If oil prices remain at elevated levels, gas prices will likely rise modestly over the coming weeks, experts said. A much more severe price spike could result, however, in the event of an escalation that damages Iranian oil infrastructure or ensnares nearby oil-shipping routes, they added. Gas prices "will likely start to rise across much of the country later this evening in response to Israel's attacks on Iran, which have caused oil prices to surge," Patrick de Haan, the head of petroleum analysis at GasBuddy, said on Friday in a post on X. A typical gallon of gas could tick up between 10 and 25 cents, de Haan added. The average price of a gallon of gas currently stands at $3.13, AAA data shows. The price increase anticipated by de Haan would amount to a hike of up to nearly 8%. Such a price increase could prove short-lived, Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, said on Friday in a note to investors. Joswick pointed to tit-for-tat Israeli and Iranian strikes last October, which spiked oil prices before a cooldown when both sides opted against escalation. "When Iran-Israel exchanged attacks last time, prices spiked, then fell once clear, not escalating and had no impact on oil supply," Joswick said. Iran launched dozens of ballistic missiles toward Israel on Friday night in retaliation for Israel's surprise attack early Friday. Israel struck at the heart of Iran's nuclear program, killing several nuclear scientists as well as high-ranking military leaders, according to Israeli officials. A further escalation of the conflict between Israel and Iran could send oil and gas prices significantly higher, said Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston. While sanctions have constrained Iranian oil output in recent years, the nation accounts for about 3% of global oil output, Krishnamoorti said. Iran also asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 20% of global oil supply. Oil prices could surge from a current level of about $73 per barrel up to $120 per barrel if the Israel-Iran conflict damages Iranian oil infrastructure or impedes the passage of some oil tankers in the Strait of Hormuz, Krishnamoorti said. That scenario would amount to a more than 60% surge in oil prices, Krishnamoorti added, resulting in a proportionate hike for gas prices. The average price of a gallon of gas would climb from $3.13 to $5.13. "If we see any throttling back of the Strait of Hormuz, we'll see a massive increase in the price of oil, and that will impact everything in the U.S.," Krishnamoorti said. That forecast of a potential price spike for oil matched a prediction from asset management firm Lazard, which warned on Friday of a possible escalation involving "strikes on Gulf energy installations or attempts to temporarily close the Strait of Hormuz. "Such a scenario would trigger "price increases upwards of $120 per barrel," Lazard said in a memo to investors. The ultimate outcome remains unclear, Krishnamoorti said, noting the scale of price increases would depend on the extent of escalation. "We may have just seen the tip of the iceberg in terms of price hikes," Krishnamoorti said.
3 days ago
- Business
Oil prices surge after Israel's strike on Iran
Oil surged, stocks fell and investors sought safety in the U.S. dollar and government bonds Friday after Israel struck Iranian nuclear and military targets in an attack that raised the risk of war between the two countries and broader instability in the Middle East. Futures for the S&P 500 fell 0.9 per cent before the opening bell, while futures for the Dow Jones Industrial Average were down one per cent. Nasdaq futures slid 1.1 per cent. U.S. benchmark crude oil rose by $4.73 US, or 6.9 per cent, to $72.77 per barrel, its biggest gain since the early days of Russia's attack on Ukraine more than three years ago. Brent crude, the international standard, climbed $4.58 to $73.94 per barrel, also the largest single-day jump since the Russian invasion. Oil prices are likely to rise in the short term but the key question is whether exports are affected, said Richard Joswick, head of near-term oil at S&P Global Commodity Insights. When Iran and Israel exchanged attacks previously, prices spiked initially but fell once it became clear that the situation was not escalating and there was no impact on oil supply, he wrote in an emailed analysis. Oil price risk premiums could rise sharply if Iran conducts broader retaliatory attacks, especially if on targets other than in Israel, Joswick said. China is the only customer for Iranian oil but could seek alternative supplies from Middle Eastern exporters and Russia, he said. Iran's oil trade is restricted by Western sanctions and import bans, and Israel exports only small amounts of oil and oil products. The yield on the 10-year Treasury fell to 4.35 per cent from 4.41 per cent late Wednesday and from roughly 4.80 per cent early this year. Treasury bonds and the dollar often rise when investors feel less inclined to take risks. Goldman Sachs, in a note on Friday, said while it has incorporated a higher geopolitical risk premium into its adjusted summer 2025 oil price outlook, it continues to assume no disruptions to Middle East oil supply after Israel's attacks on Iran. The key question now is whether this oil rally will last longer than the weekend or a week — our signal is that there is a lower probability of a full-blown war, and the oil price rally will likely encounter resistance, said Janiv Shah, analyst at Rystad. Fundamentals show nearly all Iranian exports going to China, so Chinese discounted purchases would be most at risk here. OPEC+ spare capacity can provide the stabilizing force, he added. In other markets, stocks dived and there was a rush to safe havens such as gold and the Swiss franc. An increase in oil prices would also dampen the outlook for the German economy, the economic institute DIW Berlin said on Friday. It is the only G7 nation that has recorded no economic growth for two consecutive years. The Associated Press with files from Reuters
