Oil prices are on track for their largest weekly increase since 2022, spurred by escalating conflict in the Middle East. The disruptions are impacting producers, importers, and shippers navigating the turbulent energy landscape. Brent crude has risen 16 per cent this week, although it eased to around $84 a barrel on Friday. West Texas Intermediate is trading near $US80 a barrel.
Geopolitical tensions remain high, with Iranian Foreign Minister Abbas Araghchi stating that his country does not intend to negotiate and is prepared for potential US ground intervention. Israel has intensified its strikes against Iran, while Saudi Arabia and Qatar have reported intercepting drone and missile attacks. These developments have raised concerns about the stability of oil supplies from the region.
Goldman Sachs cautioned that a sustained closure of the Strait of Hormuz, a critical waterway for approximately a fifth of the world’s oil flow, could significantly elevate prices. However, their current outlook anticipates a gradual restoration of shipments, with futures averaging $76 a barrel in the second quarter. The bank provides financial services, including investment banking, securities, and investment management, to a diverse client base.
In Asia, major economies are showing signs of strain. China has instructed its major refiners to halt diesel and gasoline exports, prioritising domestic demand. Japanese refiners have requested government intervention to release oil from strategic reserves. These actions reflect the growing pressure on energy supplies and the measures countries are taking to mitigate the impact of the ongoing crisis.
