OCAC urged the Special Investment Facilitation Council to intervene and recommend the withdrawal of petroleum and climate support levies on furnace oil, which would help restore policy consistency and support critical sectors. PHOTO: FILE
NEW YORK/LONDON/SINGAPORE:
Oil prices were little changed near a seven-month high on Tuesday as traders waited for news from nuclear talks between the US and Iran.
Brent futures fell 25 cents, or 0.4%, to $71.24 a barrel at 1541 GMT, while US West Texas Intermediate crude fell 25 cents, or 0.4%, to $66.06.
Earlier in the session, Brent was on track for its highest close since July 31 and WTI was on track for its highest close since August 1.
As part of the highest-level US visit to Caracas focused on energy policy in nearly three decades, Wright on Wednesday said the US is prepared to help.
Iran and the US will hold a third round of nuclear talks on Thursday in Geneva, Oman’s Foreign Minister Badr Albusaidi said on Sunday.
Swiss bank UBS on Tuesday said it expects a modest decline in oil prices in coming weeks provided there is no escalation of tensions in the Middle East that could disrupt supply.
US crude prices include a $3-$4 a barrel geopolitical risk premium because of tensions between the US and Iran, the director of North Dakota’s Mineral Resources Department said on Monday. North Dakota is the third-largest oil-producing state in the country.
The US State Department is pulling out non-essential government personnel and their families from the US embassy in Beirut, a senior State Department official said on Monday, amid growing concerns about the risk of a military conflict with Iran, which, in turn, is close to a deal with China to purchase anti-ship cruise missiles, according to sources.
Meanwhile, the US imposed a new tariff from Tuesday of 10% on all goods not covered by exemptions, the US Customs and Border Protection said, rather than the 15% President Trump promised last week a day after announcing a 10% rate.
China, the second-biggest economy in the world behind the US, is closely monitoring US policies and will decide “in due course” whether to adjust countermeasures to US tariffs, a commerce ministry official said on Tuesday.
On the supply front, trading houses and buyers of Venezuelan oil have chartered the first very large crude carriers to export from the South American country since a Caracas-Washington supply deal began, which is set to speed up shipments from March while boosting deliveries to India, according to sources and data.
US military forces seized a sanctioned oil tanker in the Indian Ocean after tracking it from Caribbean waters, the Pentagon said on Tuesday, adding that it was the third such interdiction in that region. The vessel was carrying crude from Venezuela that was bound for China, according to shipping reports from Venezuelan state company PDVSA.
Meanwhile, the cost of shipping oil has surged to the highest in six years, fuelled by a wave of crude exports from the Middle East as traders accelerate charters ahead of possible military conflict between the US and Iran, industry sources said.
The cost of hiring a very large crude carrier (VLCC) to carry up to 2 million barrels from the Middle East to China has more than tripled from the start of the year to over $170,000 a day on Tuesday, the highest since April 2020, LSEG data showed.
Middle East crude exports in February exceeded 19 million barrels per day, the highest since April 2020, data from shipping analytics firm Kpler showed, led by Saudi Arabia, the United Arab Emirates and Iran and as India’s demand rose after it cut Russian imports.
“VLCC freight rates have seen many positive fundamental drivers, starting with Venezuela barrels moving on legitimate freight vs a dark fleet before, increased OPEC+ production and healthy crude demand from refineries, particularly from India, which has moved from Russian to Middle Eastern barrels,” said June Goh, a senior analyst at Sparta Commodities.
“Suezmax and Aframax markets will soon receive the spillover effects in the dirty freight market,” she said, referring to crude and fuel oil transported in smaller tankers than VLCCs.
War-risk insurance premiums could move higher if Washington moves to strike Iran, and Tehran retaliates by potentially disrupting activity through the critical Strait of Hormuz, a major chokepoint for Gulf oil exports, adding to shipping costs.
Commercial maritime traffic in the Gulf of Oman and Strait of Hormuz is seeing an elevated risk of GPS jamming and spoofing of AIS ship tracking, directly linked to ongoing Iranian military exercises, maritime security risk management group Dryad Global said on Monday.
