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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.
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Business Standard
2 days ago
- Business
- Business Standard
Analysts see crude at $150 on panic buying if Israel-Iran tensions escalate
Brent crude oil prices can hit $150 a barrel (bbl) – up a massive 103 per cent from the current levels – in the worst-case scenario if Israel–Iran geopolitical tensions escalate, suggest analysts. However, if the conflict stays contained, then energy markets will re-adjust quickly. Israeli airstrikes on Iran last week had impacted energy prices with crude and natural gas prices surging as it reignited concerns about a wider conflict in West Asia. Brent crude oil prices hit $78.5/bbl in the wake of the airstrikes before dropping back to around $75/bbl. TTF (Title Transfer Facility) gas prices – a virtual trading point for natural gas in the Netherlands – surged over 5 per cent to €38.24/MWh last week in the backdrop of the developments. The attacks, according to analysts at Rabobank International, expose the wider risks to crude and natural gas supplies from the region despite the initial quick reversal of price gains for both markets. If crude, refined products and/or liquid natural gas (LNG) supplies from key producers like Saudi Arabia, the UAE, and Qatar are curtailed through direct attacks on energy infrastructure or the closure of the Strait of Hormuz, crude oil price spikes could break and sustain above the $120/bbl mark, they said. 'In case Saudi oil, gas, shipping, or refining infrastructure are targeted and destroyed, crude prices would rise above $120/bbl, even as far as $150/bbl on the initial panic buying," wrote Michael Every, global strategist at Rabobank International in a co-authored note with Joe DeLaura and Florence Schmit. Crude oil price spike Iran, meanwhile, has claimed dominion over the Strait of Hormuz, which is a major chokepoint central to the global energy market. The Strait is a transit point for 17 per cent of world oil flows (about 17 million barrels per day) and convoys of tankers from Kuwait, Iraq, Bahrain and Saudi Arabia. Qatar, Oman and the UAE operate around 98 million tons of LNG export capacity, about 18 per cent of the world's LNG supply, with most of these volumes also transiting through the Strait, reports suggest. 'Another 10 per cent rise in oil is possible due to ongoing war. Post that, it may cool off if conflict moderates due to international pressures. In case war intensifies and goes on for few months, then oil price may hit $100/bbl,' said G Chokkalingam, founder and head of research at Equinomics Research. The threat of around 1.5m barrels per day (b/d) of Russian supply going dark through sanctions during the initial stages of the invasion of Ukraine by Russia had sent Brent prices to $139/bbl three years ago, but only for about a week, and prices stayed above $100/bbl for only five months, data shows. According to Platts OPEC Survey, Iran pumped 3.25 million b/d of crude in May, with roughly 2.2 million b/d of refining capacity and 600,000 b/d of condensate splitting capacity. However, exports dipped below 1.5 million b/d in May as floating storage levels surged amid rising tensions. 'If Iranian crude exports are now disrupted, Chinese refiners, the sole buyers of Iranian barrels—would need to seek alternative grades from other Middle Eastern countries and Russian crudes. This could also boost freight rates and tanker insurance premiums, narrow the Brent-Dubai spread, and hurt refinery margins, particularly in Asia,' cautions Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights.
