Oil Up 5% as Trump Renews Threats Against Iran


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude prices rebounded Thursday (3/26) from the prior 
session's drop as U.S. President Donald Trump pressured Iran to reopen the 
blockaded Strait of Hormuz or face a bombardment of its energy plants.

   Iranian officials said any offensive against their energy infrastructure 
would result in retaliation aimed at U.S.-linked oil and desalination 
facilities across the Middle East.

   Israel, meanwhile, said it had killed Iran's navy chief Alireza Tangsiri, 
who had been overseeing the blockade of the Hormuz. Tehran did not immediately 
verify that.

   The trading of threats as the Hormuz remained closed to most of the 20 
million bpd of petroleum liquids that used to transit the waterway drove energy 
prices back up, after Wednesday's (3/25) 2% slide that came on signs of a 
possible ceasefire.

   Adding to the squeeze on global supplies, Russia said it would halt oil 
exports from several ports that sustained damage from Ukrainian drone attacks.

   "The reality is that the closing of the Strait of Hormuz due to the terror 
risk is creating mounting challenges," said Phil Flynn, analyst at Chicago's 
Price Futures Group. "While the United States has sufficient oil supplies, the 
rest of the world is significantly more vulnerable as production shut-ins are 
increasing. Even if the war ends today, it will take months to get that 
production back to full speed."

   Friday will mark one month since the start of U.S.-Israeli airstrikes 
against Iran, and the ensuing contagion from Tehran's targeting of oil and gas 
plants of neighboring countries that hosted U.S. airbases.

   A 15-point peace plan sent by the U.S. on Wednesday through Pakistani 
intermediaries has been rejected by Iran. The proposal contained many of the 
same demands Tehran had previously adhered to under a nuclear deal that the 
U.S. unilaterally withdrew from in 2018 during Trump's first term of office.

   Tehran countered with a 5-point proposal that demanded international 
recognition over Iran's sovereignty over the Strait of Hormuz, and the payment 
of war reparations. Iran's parliament, citing "sovereignty", is reportedly 
fast-tracking a bill to formalize transit fees for any ship using the strait.

   At Thursday's close, NYMEX WTI crude for May delivery settled up $4.16, or 
4.6%, at $94.48 bbl. ICE Brent crude for May delivery finished up 5.79, or 
6.6%, at $108.01 bbl.

   Among refined products, NYMEX ULSD futures for April delivery closed up 
$0.2671 at $4.2734 gallon, while NYMEX front-month RBOB settled up $0.1178 at 
$3.1302 gallon.

   The U.S. dollar index strengthened by 0.381 points to 99.78 against a basket 
of foreign currencies by 2:40 p.m. ET.

    




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