DTN Oil Update
Oil Peaks Near $120 Bbl on Fears of Prolonged Iran War
SECAUCUS, N.J. (DTN) -- Oil prices hit almost $120 bbl on Monday as Iran installed a new supreme leader against U.S. wishes while the Middle East's busiest petroleum shipping lane remained closed, signaling no immediate end to the Tehran's war with the U.S. and Israel.
Crude futures on both the New York Mercantile and Intercontinental Exchange rose to four-year highs not seen since Russia's invasion of Ukraine.
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By 8:30 a.m. EDT, NYMEX WTI for April delivery were up $9.66, or 11%, to $100.56 bbl after surging to $119.48 earlier. The ICE Brent contract for May was higher by $9.65, or 10%, at $102.34 bbl after a session peak at $119.50.
Among refined products, NYMEX ULSD and gasoline rose to their loftiest levels since July 2022. ULSD for April climbed $0.3210, or 8.9%, to $3.9434 gallon after rallying to $4.4715 gallon. NYMEX gasoline's front-month advanced by $0.2146, or 8%, to $2.9612 gallon after peaking at $3.2205 gallon.
The U.S. Dollar Index was up 0.286 points to 99.265 against a basket of currencies.
Crude prices came off their highs on a report that a Monday meeting of G7 finance ministers, led by the U.S., will discuss the potential release of their emergency petroleum reserves in coordination with the International Energy Agency. The officials are reportedly planning to release between 300 million and 400 million bbl from the IEA stockpile of 1.2 billion bbl.
Separately, Saudi Arabian producers were reported to be offering oil on spot markets, in a rare move to fill a potential void in crude supplies.
In Iran, top clerics selected Mojtaba Khamenei as Iran's supreme leader to replace his slain father, Ali Khamenei. U.S. President Donald Trump said last week the younger Khamenei would be unacceptable to Washington, which did not want another hardline leader in Iran.
Iran's offensive against shipping in the Strait of Hormuz -- a chokepoint for roughly 20% of global oil consumption -- has effectively shuttered the lane. Reports said only two crude or refined product tankers exited the Persian Gulf on Sunday, a stark decline from the typical daily average of 35.
President Trump downplayed the oil rally on Sunday, prioritizing the outcome of the war.
"Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace," Trump wrote in a social media post.