The price of Brent and WTI crude oil reached their highest levels since October 2023 due to geopolitical tensions between Israel and Iran. On April 5, Brent crude oil rose by 0.6% to 91.17 USD per barrel, while US crude oil increased by 0.4% to 86.9 USD. These prices are the highest in six months, with both Brent and WTI increasing by over 4% this week.
Iran, which is the third-largest oil producer in OPEC, has announced its intention to retaliate against Israel after an Iranian general was killed in an attack in Syria, although Israel has not claimed responsibility for the attack. This has raised concerns about potential conflicts in the Middle East that could disrupt oil supplies and impact global economies.
In addition to these tensions, potential reductions in Russian oil refinery capacities due to attacks by Ukraine have also influenced oil prices. OPEC+ has decided to maintain production policies and pressure member countries to comply with production reduction policies, which could further tighten oil supplies and reduce inventories in the coming quarter.
On a positive note, the US employment report for March showed a more vibrant labor market than expected, with 303,000 new jobs created. This increased demand for oil but could delay the US Federal Reserve’s decision to reduce interest rates this year. Analysts forecast a global increase in oil demand in the second quarter and note a decrease in the number of drilling rigs in the US, indicating potential future changes in oil and gas output.
