Crude oil prices experienced a surge last week due to escalating geopolitical threats impacting supply chains, according to ANZ. Brent Crude Oil rose 2.2 per cent to $US64.39 a barrel after a drone strike severely damaged an oil depot and vessel at Russia’s Black Sea port of Novorossiysk. This port is a critical hub, responsible for shipping approximately 700,000 barrels daily over the past two months. Ukraine also claimed responsibility for a strike targeting Rosneft’s Saratov refinery, located in the Volga region. Rosneft is a Russian integrated energy company. Lukoil is a Russian multinational energy corporation headquartered in Moscow, specializing in the business of extraction, production, transport, and sale of petroleum, natural gas, and petroleum products.
Adding to supply concerns, a US defence official reported that Iranian forces seized a tanker after it traversed the Strait of Hormuz, a vital waterway that facilitates roughly one-fifth of global oil movement. This incident has heightened anxieties regarding the safety of merchant shipping in the region. These disruptions coincide with the imminent enforcement of US sanctions on Rosneft and Lukoil, further bolstering prices and mitigating potential downside risks.
ANZ analysts highlighted that these factors collectively contribute to price support, especially after Brent Crude’s year-to-date decline of over 16 per cent, driven by oversupply expectations. The fresh geopolitical risks have counteracted some of the downward pressure, injecting uncertainty into the market.
In contrast, European gas futures continued their downward trend as robust supply conditions alleviated shortage concerns. Meanwhile, North Asian LNG prices saw gains of over 2 per cent, driven by increased demand, with Vietnam and Bangladesh actively participating in the spot market.
