Oil and Gas outlook: Brokerages are turning cautious as fresh attacks on key energy infrastructure amid tensions in the Middle East have heightened risks of supply disruptions. Citi says that Brent prices could remain elevated at $110-120 per barrel (bbl) in the very near term.
Oil prices jump by over 60% to USD 112 per barrel
Brent crude prices have surged by over 60 per cent since the start of the US-Iran-Israel conflict, rising to around USD 112 per barrel from nearly USD 70 earlier, reflecting major disruptions in global energy supply, ANI reported.
In the past 30 days alone, crude prices have jumped about 56 per cent, underscoring the severity of the ongoing supply shock. The spike in oil prices comes as tensions in West Asia have disrupted key supply routes, especially through the Strait of Hormuz, a critical global channel for crude trade, the report added.
Citi sees prolonged disruption of gas value chain
The crisis has also affected global liquefied natural gas (LNG) flows, with attacks on energy infrastructure in Qatar worsening the situation. Iranian strikes have reportedly damaged facilities impacting nearly 17 per cent of Qatar’s LNG export capacity. This poses a major risk for India, which imports around 47 per cent of its gas requirements from Qatar, ANI report said.
According to Citi, recent damage to the Qatari LNG facility reinforces the view that the gas value chain could face deeper and more prolonged disruption than oil.
US lifts Iranian oil sanctions for 30 days
Last week, the United States announced the temporary lifting of sanctions on the sale of Iranian oil stranded at sea in an effort to cool down soaring global crude prices.
US Treasury Secretary Scott Bessent said the temporary measure will make available 140 million barrels of Iranian oil to global markets.
“This temporary, short-term authorisation is strictly limited to oil that is already in transit and does not allow new purchases or production,” Bessent said in a long post on X.
The price of Brent crude has witnessed sharp swings from roughly USD 70 per barrel before the war began to as high as USD 119.50 this week.
“Today, the Department of the Treasury is issuing a narrowly tailored, short-term authorisation permitting the sale of Iranian oil currently stranded at sea,” Bessent said.
The US official claimed that at present, sanctioned Iranian oil is being hoarded by China on the cheap.
By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets, expanding the amount of worldwide energy and helping to relieve the temporary pressures on supply caused by Iran, he said.
“In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury,” Bessent said.
The pause on sanctions on Iranian oil loaded on vessels begins Friday and is set to end on April 19.
Petrol prices have increased from USD 3 a gallon in the US before the war began to USD 3.99 on Saturday.
“This temporary, short-term authorisation is strictly limited to oil that is already in transit and does not allow new purchases or production,” Bessent said.
Further, Iran will have difficulty accessing any revenue generated, and the United States will continue to maintain maximum pressure on Iran and its ability to access the international financial system, he said.
(With inputs from PTI)
