International oil benchmark Brent jumped this morning as pressure intensifies on three fronts- the Strait of Hormuz, Bab al-Mandeb, and the Black Sea.
Overnight, at least two oil tankers headed towards the Bab al-Mandeb chokepoint in the Red Sea turned around after Yemen's Houthi militants threatened to blockade Saudi Arabia. Multiple other vessels heading towards the crossing, which handled 12% of global oil flows before the war, also paused or turned around in the Gulf of Aden.
Meanwhile, Ukrainian attacks on Russian shipping have disrupted another supply route that distributes oil from a pipeline that transports Russian and Kazakh oil to the Black Sea.
Lastly, traffic at the Strait of Hormuz remains subdued, with crossings over the past week averaging less than a tenth of prewar levels.
Apart from crude oil, refined products such as diesel are also "screaming tightness", analysts at Dutch bank ING wrote today. Diesel crack spreads in Europe-which measure the difference between diesel and crude-oil prices-are at historical highs.
"And for the [petroleum] products market, there's no quick fix to this tightness," the ING analysts added. Normalization in Middle East oil flows, increased run rates among Asian and Middle Eastern refineries, and an easing in Ukrainian attacks on Russian refineries are all needed, they said.
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