Vincent Wu
Research Associate, Flux
Brent Trades Up To $118/bbl
Brent tests last week's $118 high; escalation of attacks by Israel and Iran on gasfields; Iran strikes GCC refineries
Brent crude futures continued its rally this morning from the $110/bbl level, climbing by nearly $10 to reach a high of $118.81/bbl, which briefly surpassed last Monday’s high of $117.91/bbl.
Prices have fallen to the $115 level by 18:00 SGT (10:00 GMT), with the hourly candle printing a shooting star, indicating selling pressure at higher levels. Prices have jumped further following an escalation of attacks by Israel and Iran on gasfields, heightening fears of prolonged disruption to energy supplies. Iran caused significant damage to Ras Laffan – the world’s largest LNG facility in Qatar, in response to Israel’s attack on its South Pars gasfield. Iran also stuck Aramco’s SAMREF refinery in the Red Sea port of Yanbu, Kuwait’s Mina Al-Ahmadi and Mina Abdullah refineries, while operations at the Habshan gas facility and Bab field in Abu Dhabi were forced shut following missile interceptions. Meanwhile, Asia is set to import a record volume of Russian fuel oil in March after the US eased sanctions. Ship-tracking data from Kpler indicate the region will receive over three million tons of Russian fuel oil this month. South Korea is reportedly considering resuming imports of Russian crude oil and naphtha, which it had previously suspended since December 2022. Asian buyers have bought the most US oil in three years this month as they seek alternatives to Middle Eastern crude, with April-loading American oil around 60mb, the highest level since April 2023. Brazilian state-run oil firm Petrobras is operating 6 of its 11 domestic refineries beyond installed capacity to produce diesel locally amid a spike in prices caused by the Iran conflict. ExxonMobil, BP and Vitol are shipping a record volume of oil products to Australia from the US in March, where at least 200kt of gasoline, diesel, and jet fuel have been loaded, or will be loaded, by the end of March, representing the most fuel shipped to Australia from the US for a single month in more than three decades. Finally, the May/Jun and May/Nov Brent futures spreads are at $6.55/bbl and $27.35/bbl respectively.
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