ING analysts Warren Patterson and Ewa Manthey say Brent has broken back above $100/bbl as the oil market reprices expectations around the Iran conflict and disruptions in the Persian Gulf. They highlight fading hopes for a US–Iran resolution, growing demand destruction, tight jet fuel markets in Europe and record US exports of oil and refined products.

Brent climbs as disruption persists

"Hopes for a resolution between the US and Iran are fading as peace talks stall. In addition, Iran’s seizure of two vessels attempting to transit the Strait of Hormuz suggests disruptions to shipments are set to continue. The market is having to reprice expectations."

"This saw Brent break convincingly back above $100/bbl. As hopes fade, the reality of the supply disruption will set in, leaving further upside for prices."

"Meanwhile, we continue to see growing demand destruction in the oil market, a trend that will intensify as Persian Gulf supply disruptions persist. Airlines continue to announce flight cancellations amid a tightening in jet fuel supply and significant price strength. Europe’s jet fuel market is heavily exposed to developments in the Middle East."

"Meanwhile, Energy Information Administration data continue to show that the US is exporting record amounts of oil and refined products, as buyers around the globe seek alternative supplies."

"Although the US market has been relatively shielded from Middle East supply disruptions, prolonged instability tightens conditions as global buyers increasingly turn to US supplies."

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