Brent crude surged above $96 per barrel after Iran fired missiles at Kuwait, deepening fears over Middle East supply. Asian refiners are racing to lock in Gulf barrels, pushing Dubai futures toward $100. Saudi exports have plunged to their lowest level in records dating back to early 2017.
Brent surged above $96 per barrel after Iran fired missiles at Kuwait, according to CNBC. The strike escalated tensions in the Middle East and stoked speculation that crude oil could push toward new all-time highs.
Market pricing still points to a low probability of a new all-time high by September 30, though odds tick slightly higher for December 31. Even so, the incident adds to existing geopolitical risk already weighing on oil markets.
Asian refiners scramble for barrels
Refiners in India and China, the world's two biggest oil importers, are stepping up spot purchases of Middle Eastern crude and competing with buyers in South Korea and Japan for supplies. As a result, benchmark Dubai futures have climbed to nearly $100 a barrel, the highest level since May.
Indian Oil Corp. has led the accelerated buying, and traders say private refiner Reliance Industries may follow. PetroChina, meanwhile, has bought millions of barrels from Saudi Arabia, Iraq and the United Arab Emirates on the spot market, while some buyers have reached as far as Brazil, Canada and Argentina for supply.
Gulf premiums surge as exports plunge
Abu Dhabi's Murban crude now commands a premium of more than $30 a barrel to Dubai for delivery to East Asia, at least $10 more than the cost of shipping West Texas Intermediate from the US. Buying remains below prewar levels, yet the rush for cargoes is putting intense pressure on prices.
Observed crude exports from Saudi Arabia, the world's biggest exporter, have plunged to their lowest level in records dating back to early 2017. At least two Indian refiners have also seen August cargoes delayed into September or October.
Strait of Hormuz flows in focus
About 6 million to 8 million barrels a day of Middle Eastern crude flowed through the Strait of Hormuz last week, though recent tanker attacks may have reduced volumes since. Traders are watching closely for further disruption as the US blockade continues to curb Iranian shipments to China.
Sources: Crypto Briefing, Rigzone.com: Latest News Headlines
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