Middle East Tensions Push Oil Prices Higher Amid Stable Global Supply

Petroleum Price

• Oil prices edged up in early Asian trading hours on Saturday, holding onto their strong weekly gains, as investors weighed the Middle East conflict and the potential for crude flow disruptions against a well-supplied global market.
• Brent crude futures rose by 9 cents, or 0.12%, to $77.71 a barrel as of 0010 GMT. U.S. West Texas Intermediate (WTI) crude futures increased by 8 cents, or 0.11%, to $73.79 a barrel. MCX crude oil prices opened at Rs. 6192 with a gain of 0.50%.

Petroleum Demand and Supply

• The Nigerian Ports Authority, in collaboration with other government agencies, has finalized plans to implement the sale of crude oil to Dangote’s refinery and other refined products in Naira.
• Speaking at a meeting held at the Lagos Headquarters of the Nigerian Ports Authority, Managing Director Dr. Abdulkadir Dantsoho announced that the Federal Government’s directive for the Nigerian Ports Authority to coordinate service provision from all regulatory, security, and other stakeholders for the smooth implementation of this initiative has commenced.
• Dr. Dantsoho further stated that the agency would work with other stakeholders to establish a One-Stop Shop that will coordinate service provision from all regulatory, security agencies, and other stakeholders to ensure seamless execution of the initiative.

Petroleum News

• Oil prices rose this week as tensions escalated in the Middle East. Iran launched missiles at Israel, and Israel threatened retaliation, raising concerns about a potential disruption in oil flow from the region. A rise in oil prices usually sparks fear of a spike in gas prices, but experts suggest reasons why this may not occur.
• Here’s an overview of the current situation and the outlook for oil and gas prices: Familiar tensions, different times. Oil prices rose by more than $6 per barrel this week, and gasoline prices increased as well, with the average price per gallon rising by 5 cents compared to last week. Any significant escalation of tensions in the Middle East brings memories of the 1973 oil embargo during the Yom Kippur war, which led to a fourfold increase in oil prices.
• However, the global oil supply landscape has changed drastically since the 1970s, with the U.S. now being the world’s largest oil producer. Months of conflict between Israel and the Iranian-backed Hamas and Hezbollah did little to drive up prices for OPEC and its 12 oil-producing members. Only the possibility of a direct confrontation between Israel and Iran has had an impact.
• Gasoline prices are rising but remain lower than last year. U.S. gasoline prices typically follow crude oil trends, as oil costs make up half the price of a gallon of gas.

Expert Opinion

• Despite the threat of war and a hurricane season that is still developing, domestic gasoline prices are declining, according to AAA spokesperson Andrew Gross in a statement on Thursday. “There are now 18 states east of the Rockies with average gas prices below $3 per gallon.”
• AAA also estimates that around 1.2 million of its members live in households with one or more electric vehicles. The organization believes that lower gas demand and reduced oil costs will likely keep gas prices at the pump decreasing.