Crude oil prices, which topped $106 per barrel yesterday, have eased today, as traders process the latest Houthi attacks on Saudi Arabia and the related risk to energy supply, while also waiting to see if the Russian diesel deal would affect end prices.
At the time of writing, Brent crude was trading at $105.43 per barrel, with West Texas Intermediate at $92.60 per barrel, both slightly down from Monday’s close but higher than last week.
Saudi Arabia’s energy minister Abdulaziz bin Salman reassured market players earlier this week that there is no danger for oil exports out of the country, calling Riyadh “the capital of energy security”, despite the recent deadly attacks on the Saudi capital.
“Energy resilience is beyond barrels of spare capacity, of pipelines and gigawatts of generation,” Prince Abdulaziz said at the WPC Energy Congress on Monday, as quoted by Bloomberg. “It must also be measured by the ability to maintain, repair, reroute, substitute and recover. Above all, it must be measured by the ability to continue delivering under pressure.”
Saudi Arabia has been ramping up its oil exports despite attacks on its key pipeline, port infrastructure, and refineries. Some doubt whether the official information is accurate as Iran and the Houthis escalate their attacks on Arab states, but the fact that there is a global shortage of tankers supports data about a significant increase in ship-to-ship transfers in the Persian Gulf to get Saudi and other barrels out of the region.
Meanwhile, the future of the diesel deal that President Trump announced he had inked with President Putin appears to be uncertain as some in Congress argue it violates the sanctions regime against Russia. Analysts, for their part, have noted that the volume, at a total of 4.8 million tons, is far from significant enough to affect prices at the pump for any meaningful length of time.
By Irina Slav for Oilprice.com