Latest news with #NationalIranianOil
Arab News
3 hours ago
- Business
- Arab News
Oil settles up 7% as Israel, Iran trade air strikes
HOUSTON: Oil prices jumped on Friday and settled 7 percent higher as Israel and Iran traded air strikes, feeding investor worries that the combat could widely disrupt oil exports from the Middle East. Brent crude futures settled at $74.23 a barrel, up $4.87, or 7.02%, after earlier soaring over 13% to an intraday high of $78.50, the strongest level since January 27. Brent was 12.5% higher than a week ago. US West Texas Intermediate crude finished at $72.98 a barrel, up $4.94, or 7.62%. During the session, WTI jumped over 14% to its highest since January 21 at $77.62. WTI climbed 13% to its level a week ago. Both benchmarks had their largest intraday moves since 2022 when Russia's invasion of Ukraine caused a spike in energy prices. Israel said it had targeted Iran's nuclear facilities, ballistic missile factories and military commanders on Friday at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon. Iran has promised a harsh response. Shortly after trading ended on Friday, Iranian missiles hit buildings in Tel Aviv, Israel, according to multiple media reports. Explosions were also heard in southern Israel. US President Donald Trump urged Iran to make a deal over its nuclear program to put an end to the "next already planned attacks." The National Iranian Oil Refining and Distribution Company said oil refining and storage facilities had not been damaged and continued to operate. Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), currently produces around 3.3 million barrels per day (bpd), and exports over 2 million bpd of oil and fuel. Spare capacity among OPEC and its allies, including Russia, to pump more oil to offset any disruption is roughly equivalent to Iran's output, according to analysts and OPEC watchers. The latest developments have also stoked concerns about disruptions to the Strait of Hormuz, a vital shipping passage. "Saudi Arabia, Kuwait, Iraq and Iran are wholly locked into one tiny passage for exports," said Rabobank in a note, regarding the Strait. About a fifth of the world's total oil consumption passes through the strait, or some 18 to 19 million barrels per day (bpd) of oil, condensate and fuel. "Israeli action has so far avoided Iranian energy infrastructure, including Kharg Island, the terminal responsible for an estimated 90% of Iran's crude oil exports," said Ben Hoff, head of commodity research at Societe Generale. "This raises the possibility that any further escalation could follow an 'energy-for-energy' logic where an attack on one side's oil infrastructure might invite a retaliatory strike on the other's," Hoff said. Iran could pay a heavy price for blockage of the Strait of Hormuz, analysts said on Friday. "Iran's economy heavily relies on the free passage of goods and vessels through the seaway, as its oil exports are entirely sea-based. Finally, cutting off the Strait of Hormuz would be counterproductive to Iran's relationship with its sole oil customer, China, said analysts with JP Morgan. Money managers raised their net long U.S. crude futures and options positions in the week to June 10, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The speculator group raise its combined futures and options position in New York and London by 15,157 contracts to 121,911 during the period. Baker Hughes said the number of U.S. oil and natural gas rigs fell for seventh week in a row with the total count down by 35 rigs or 6% below this time last year. The oil rig count fell by three to 439 this week, its lowest since October 2021, while gas rigs slipped by one to 113. In other markets, stocks dived and there was a rush to safe havens such as gold, the U.S. dollar and Swiss franc.
Zawya
a day ago
- Business
- Zawya
Oil jumps nearly 9% after Israel's strikes on Iran
Oil prices jumped nearly 9% on Friday to near multi-month highs after Israel launched strikes against Iran, sparking Iranian retaliation and raising worries about a disruption in Middle East oil supplies. Brent crude futures were up $6.19, or around 8.9%, to $75.55 a barrel at 1019 GMT, after hitting an intraday high of $78.50, the highest since January 27. U.S. West Texas Intermediate crude was up $6.22, or 9.1%, at $74.26 after hitting $77.62, its highest level since January 21. Friday's gains were the largest intraday moves for both contracts since 2022, after Russia's invasion of Ukraine caused a spike in energy prices. Israel said it had targeted Iran's nuclear facilities, ballistic missile factories and military commanders on Friday at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon, while Iran has promised a harsh response. U.S. President Donald Trump urged Iran to make a deal over its nuclear programme, to put an end to the "next already planned attacks." The National Iranian Oil Refining and Distribution Company said oil refining and storage facilities had not been damaged and continued to operate. The primary concern was whether the latest developments would affect the Strait of Hormuz, said SEB analyst Ole Hvalbye. The key waterway had been at risk of impact from increased regional volatility previously but had not been affected so far, Hvalbye said. There also was no impact to oil flow in the region so far, he added. About a fifth of the world's total oil consumption passes through the strait, or some 18 to 19 million barrels per day (bpd) of oil, condensate and fuel. Analysts at consultancy Sparta Commodities said that any significant crude supply disruptions would lead to sour crude grades being marginally priced out of refineries in favour of light sweets. Under a worst case scenario, JPMorgan analysts said on Thursday that closing the strait or a retaliatory response from major oil producing countries in the region could lead to oil prices surging to $120-130 a barrel, nearly double their current base case forecast. "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 increased uncertainty speaks in favour of a higher risk premium on the oil price, which is why it is unlikely to fall below $70 on a sustained basis for the time being ... Fundamental data is taking a back seat in the current situation," analysts at Commerzbank said in a note. (Reporting by Seher Dareen and Florence Tan; Editing by Stephen Coates, Rachna Uppal and Kim Coghill)
Zawya
a day ago
- Business
- Zawya
An overview of Iran's energy industry and infrastructure
Israel carried out strikes on Iran on Friday, targeting its nuclear facilities, ballistic missile factories and military commanders at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon. The National Iranian Oil Refining and Distribution Company said refining facilities and oil storage did not sustain any damage in the attacks. Iran, the third largest producer in the Organization of the Petroleum Exporting Countries, extracts about 3.3 million barrels of oil per day (bpd), or around 3% of global output. Following are some facts on the country's energy industry, exports and the impact of previous Western sanctions. SANCTIONS AND OPEC Iran's oil production was at its peak in the 1970s with record output of 6 million bpd in 1974, according to OPEC data. That amounted to over 10% of world output at the time. In 1979, the United States imposed the first wave of sanctions on Tehran and since then the country has been the target of several waves of U.S. and European Union sanctions. The United States tightened sanctions in 2018 after Trump exited a nuclear accord during his first presidential term. Iran's oil exports fell to nearly zero during some months. Exports rose steadily under Trump's successor President Joe Biden's administration with analysts saying sanctions were less rigorously enforced and Iran had succeeded in evading them. Iran is exempt from OPEC+ output restrictions. WHO IS THE MAIN BUYER OF IRANIAN OIL? Iran's crude exports have risen to a multi-year high of 1.8 million bpd in recent months, the highest since 2018, driven by strong Chinese demand. China says it does not recognise sanctions against its trade partners. The main buyers of Iranian oil are Chinese private refiners, some of whom have recently been placed on the U.S. Treasury sanctions list. There is little evidence, however, that this has impacted flows from Iran to China significantly. Iran has for years evaded sanctions through ship-to-ship transfers and hiding ships' satellite positions. PRODUCTION AND INFRASTRUCTURE FGE consultancy says Iran refines about 2.6 million bpd of crude and condensate and exports 2.6 million bpd of crude oil, condensate and refined products. The country also produces 34 billion cubic feet of gas per day, according to FGE, accounting for 7% of global production. All gas is consumed domestically. Iran's hydrocarbon production facilities are primarily concentrated in the southwest, in the Khuzestan province for oil and in the Bushehr provinces for gas and condensate from the giant South Pars field. It exports 90% of its crude via Kharg Island. Analysts say Saudi Arabia and other OPEC members could compensate for the drop of Iranian supply by using their spare capacity to pump more. Though with a number of producers in the group currently in the process of raising output targets, their spare capacity is becoming more strained. (Compiled by Dmitry Zhdannikov and Alex Lawler; Editing by Emelia Sithole-Matarise and Sonali Paul)
