DTN Oil Update
Oil Prices Extend Rise on Middle East Supply Disruptions
VIENNA (DTN) -- Oil and product futures continued to climb Tuesday morning as millions of barrels per day of Middle Eastern crude oil and refined product supply remained cut off from export markets, deepening supply risks from an escalating U.S.-Iran war.
Tanker traffic through the Strait of Hormuz remained all but idle for a second day since Iran struck several vessels transiting the world's most significant oil chokepoint.
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Front-month WTI and Brent futures soared to a 14-month high, and ULSD futures traded at their highest since September 2023 in response to the sudden loss of 20% of global petroleum supply.
The U.S.-Iran war has widened since Israel's opening salvo on Saturday, Feb. 28. Iran has over the past three days launched attacks against several U.S.-allied neighboring countries, forcing shut crude oil production in northern Iraq and some refinery operations in Saudi Arabia. Israel on Tuesday launched new attacks on Iran, and Iranian missiles targeted Israel and U.S. bases in the region.
The expanding scope of the war -- 10 countries have so far suffered attacks -- increases risks of a drawn-out conflict curbing oil supply.
U.S. President Donald Trump on Monday already reset expectations of a swift regime change in Iran, saying that the attacks against the country are projected to last four to five weeks and that the U.S. has the capability to continue operations for far longer.
The International Energy Agency is holding a meeting in Paris today on the Iran situation. The energy-watchdog said that they were "ready to stabilize" the oil market. Prior to the war, the world was facing a large surplus as supply additions were set to dwarf demand growth. The substantial supply shock has changed the calculus in the short term. Longer term, however, high oil prices have the tendency to stimy demand and incentivize production even more.
At 8:30 a.m. EST, NYMEX WTI crude futures for April delivery were up $5.10 to trade near $76.33 bbl, and ICE Brent crude for May delivery advanced $5.82 to $83.56 bbl.
Downstream, RBOB futures for April delivery climbed $0.1288 to $2.4994 gallon, and ULSD futures soared $0.4216 to $3.3220 gallon.
The U.S. Dollar Index strengthened by 0.8 points to 99.135 against a basket of foreign currencies.