West Texas Intermediate, or the US Crude variant continues to remain around the $113 a barrel mark, having tested levels of $115 on Monday. Brent crude also remains around the $110 a barrel mark.
Oil prices remain higher despite reports emerging of the US and Iran being engaged in talks for a potential ceasefire, a news that Iran went on to reject, stating that they have put forth their own points to end the war, that has now entered its sixth week.
Markets are also on the edge ahead of US President Donald Trump’s deadline to reopen the Strait of Hormuz or face the consequences that he has warned of in multiple social media posts.
Trump said that the US military could destroy “every bridge in Iran by 12 o’clock tomorrow night.” Power plants would be rendered “burning, exploding and never to be used again,” remarks, which, if they become a reality, would be a breach of the Geneva Conventions.
Iran has also retaliated by saying that it will respond to Trump’s threats by ramping up its own attacks on energy infrastructure in the Gulf, a move that could escalate the damage to the global economy.
Trump’s “not backing off previous statements,” said Carl Larry, an oil and gas analyst at Enverus. “Think we’re getting to an end, but that might not be the best if it culminates in military actions.”
WTI’s prompt spread or the difference between its two nearest contracts, at one point, traded at $15.5 a barrel on Monday, close to the biggest premium on record. The widening was due to expectations of tighter US supplies as overseas buyers rush to buy American crude.
(With Inputs From Agencies)
