Brent crude futures surged more than 1.8% to trade at $105.8 per barrel, as seen at 7.40 am IST. Front-month Brent futures hit a record monthly gain of 64% in March, Reuters cited LSEG data dating back to June 1988. WTI Crude meanwhile surged nearly 1.7% to $103 per barrel. Oil prices have sustained above the crucial $100 mark for most of March following the closure of the Strait of Hormuz, and this trend has now spilled over into April.
Oil output by the Organization of the Petroleum Exporting Countries (OPEC) dropped 7.3 million barrels per day in March when compared to the previous month, a Reuters survey showed on Tuesday. This shows the extent of the oil crisis rattling global markets.
Iran-US war to end soon?
However, investors increasingly hope for an end to the raging war soon. US President Donald Trump said the country could end its military attacks on Iran within two to three weeks and Tehran did not have to make a deal as a prerequisite for the conflict to ease. “We’ll be leaving very soon,” Trump told reporters at the White House on Tuesday.
Iranian President Masoud Pezeshkian meanwhile said that the country had the “necessary will” to end the ongoing war with Israel and the United States, but was seeking guarantees that the conflict would not be repeated.
“We possess the necessary will to end this conflict, provided that essential conditions are met — especially the guarantees required to prevent repetition of the aggression,” Pezeshkian said in a phone conversation with the president of the European Council, according to a statement from his office, reiterating a key demand of Tehran’s.
US Secretary of State Marco Rubio said that Washington could see the “finish line” in the Iran war, which is now in its fifth week, and the United States will have to reexamine ties with NATO after the conflict.
What lies ahead?
Even if the war eases in the near-term, oil prices may not cool down soon. Ambit Institutional Equities, in its report, said that even if geopolitical tensions cool off, oil prices will remain elevated, with $80 being the new normal for Brent due to infrastructure damage, geopolitical risk premiums, and inventory restocking.
(With inputs from agencies)
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