Oil: Supply risks and policy responses – Commerzbank

Commerzbank commodity analysts Barbara Lambrecht and Carsten Fritsch highlight that the war in Iran and disruptions in the Strait of Hormuz are tightening the Oil market, widening Brent–WTI spreads and time spreads. Upcoming reports from the IEA, EIA and OPEC will focus on inventories, while the US government is weighing various measures to curb rising Oil prices.

War, spreads and US interventions

"The war in Iran remains the dominant topic on the commodity markets, especially the energy markets. The three energy agencies are likely to provide some context in their monthly publications, with the focus likely to be on the stock situation."

"The longer shipping traffic is paralysed, the higher the disruptions are likely to be, partly because the region has limited rerouting and storage capacities. The IEA estimated the bypass capacity for crude oil via pipeline at 3.5 to 5.5 million barrels per day."

"The disruptions to oil supplies caused by the interruption of supply routes through the Strait of Hormuz have led to significant increases in oil prices and price differentials between different types of oil, oil products and maturity dates. The price gap between Brent and WTI widened to 9 USD per barrel at one point."

"The time spreads for crude oil and gasoil, i.e. the price differentials along the forward curves, also widened significantly this week. The price difference between the first two Brent forward contracts is USD 4.5 per barrel."

"Since the start of the Iran war, oil prices have risen by around 20%. The US government is apparently considering various measures to curb the price increase."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)