Donna Dong
Research Analyst, Flux
Brent Declines to $98.80/bbl
G7 holds off reserves release as Iran risks grow; India buys Russian crude and Saudi intercepts drones near key oilfield.
The May ’26 Brent futures contract declined from $105.16/bbl at 14:10 GMT to $98.80/bbl at 16:50 GMT (time of writing).
In the news, a G7 official told Reuters that the finance ministers have broadly agreed not to release strategic oil reserves at this time. The official added that the decision was “just about timing” and that “more analysis is needed.” In India, Reliance Industries has purchased at least 6mb of Russian Urals crude oil for March delivery after Middle Eastern supplies were affected by the Iran conflict. Reuters sources report that Reliance bought the cargoes at prices ranging from a discount of $1 to a premium of $1 to dated Brent. Elsewhere, Saudi Arabia has reportedly intercepted and destroyed four drones headed toward its Shaybah oilfield, according to Major General Turki Al-Maliki, a spokesperson of the Saudi Ministry of Defence. According to Saudi Aramco, Shaybah’s total production capacity is roughly 1mb/d of crude oil and has a 2.4Bscf/d NGLs recovery plant. In other news, following reports that the US administration had discussed seizing Kharg Island, JP Morgan has said in a note that Iran's oil exports could halt, and production could drop by half if this were to materialise, potentially leading to additional Tehran-led attacks on regional oil infrastructure. Iran produces roughly 4.5% of global oil supplies, with outputs of 3.3mb/d of crude and 1.3mb/d of condensate and other liquids. Finally, at the time of writing, the front-month (May/Jun) and 6-month (May/Nov) Brent futures spreads are at $6.25/bbl and $21.80/bbl, respectively.
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