Crude oil drives higher as traders brace for longer Mideast war.
Oil pushed higher on Friday as traders braced for the Iran war potentially stretching into April and attacks continued across the Middle East, with transit through the critical Strait of Hormuz still all but halted.
Global benchmark Brent rose towards US$110 (RM440.99) a barrel after erasing an early drop, while West Texas Intermediate (WTI) was near US$95. US President Donald Trump pushed back a deadline for striking Iran’s energy by 10 days, prolonging uncertainty over the course of the war well into next month.
“The market is getting an understanding that there is no certain end to the conflict,” said Carl Larry, an oil and gas analyst at Enverus. “We are heading into another weekend with risk still to the upside.”
The extension allows more time for talks, but also for the US to amass additional forces in the region. These already include Marine Expeditionary Units and soldiers from the Army’s 82nd Airborne Division, according to people familiar with the matter. Separately, The Wall Street Journal said the Pentagon is looking at sending up to 10,000 extra ground troops.
Brent crude is on pace for a record monthly gain in March, as the war between the US, Israel and Iran has rocked the oil-rich Middle East. With Tehran forcing the near-complete closure of the Strait of Hormuz, the conflict has severely restricted flows of energy that are vital to the global economy.
Attacks continued on Friday. Among them, Israel said it struck Iran’s primary facility for the production of missiles and sea mines in the city of Yazd, and Kuwait said drones targeted the Shuwaikh port, resulting in damage. Saudi Arabia intercepted drones in its eastern region.
Trump’s move “takes some near-term heat out of the market, but risks still lean to the upside”, said Ewa Manthey, a commodities strategist at ING Groep NV. With about eight million barrels a day of supply already offline, and a much larger volume of flows through the Persian Gulf still vulnerable, “the geopolitical premium is unlikely to fade meaningfully”, she said.
While there was a roughly 60% probability of the war finishing by end-March, there were 40% odds of a longer conflict, possibly through June, according to Macquarie Group Ltd analysts including Peter Taylor. The latter scenario could drive oil to US$200 a barrel, they wrote in a note.
Source: Theedgemalaysia