Key facts
- Brent crude futures surpassed $93 per barrel, reaching a three-week high.
- WTI Crude futures traded above $85 per barrel.
- President Trump announced an "unprecedented" economic pressure campaign against Iran.
- Analysts suggest the market is underestimating real supply disruption downstream.
- The US diesel crack spread hit triple digits for the first time.
Oil prices extended their rally for a fifth consecutive day, with Brent crude futures topping $93 per barrel and WTI Crude exceeding $85, driven by President Trump's escalating economic pressure campaign against Iran. Trump threatened "tremendous economic consequences" for any country aiding Iran, signaling a further tightening of sanctions.
Analysts suggest that the market may be underestimating the real supply disruption, particularly downstream. The diesel crack spread in the United States reached triple digits for the first time, indicating significant stress in refined product markets. Concerns about potential disruptions to critical Middle East chokepoints, such as the Strait of Hormuz, also contributed to the price surge.
Amidst the geopolitical tensions, a tanker in the Gulf of Aden broadcast a distress call after being approached by an unauthorized vessel. While the Houthi group has claimed responsibility for targeting Saudi oil tankers, the incident highlights broader maritime security risks in the region.
ING's commodities strategists noted that the US is intensifying efforts to isolate Iran, while Saxo Bank's Ole Hansen pointed out that current crude prices do not reflect the potential for prolonged disruption to vital oil transit routes.