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Highlights
- Crude oil prices tumbled on Thursday after gaining significantly on the previous day.
- Both oil benchmarks settled nearly 5% higher on Wednesday following reports that crude exports from Kazakhstan's CPC terminal had completely halted.
- A revival of Iran’s export restrictions may help to cool the immense tight supplies of crude oil in the international market.
Crude oil prices tumbled during initial trading sessions on Thursday over prospects of revival of 2015 Iran Nuclear deal, expected to bring nearly 1Mbpd of oil into the market to cool boiling crude oil prices.
The prices started rallying on Tuesday after some European Union members considered the option to impose sanctions on Russian oil. The prices continued their rally on Wednesday too with both benchmarks rising more than 5% following reports that crude exports from Kazakhstan's Caspian Pipeline Consortium (CPC) terminal had completely halted following storm damage.
On Wednesday, both oil benchmarks settled more than 5.3% higher with Brent reaching US$121.60/bbl and WTI closing at US$114.93/bbl as the potential for more supply disruptions weighed on the market.
Source: Refinitiv Eikon
On Thursday, May delivery Brent Crude oil futures further declined and last traded at US$113.77 per barrel down 1.01%, while May delivery WTI crude oil futures exchanged hands at US$113.75 per barrel, down 1.03% at 5:41 PM AEDT.
Also Read: Crude oil surges to 14-year highs on delays in Iranian talks
Revival of Iran’s deal
A revival of Iran’s export restrictions may help to cool the immense tight supplies of crude oil in the international market, ignited initially by Russian oil embargoes and Kazakh’s CPC pipeline disruptions.
Kazakhstan's CPC terminal located on Russia's Black Sea coast fully stopped on Wednesday after damage caused by a major storm and continued bad weather
The CPS pipeline was responsible for carrying nearly 1.2 million barrels per day of Kazakh's main crude grade which is equal to nearly 1.2% of the world's total oil demand.
Both oil benchmarks have been steadily rallying since Russia started Ukraine’s invasion on 24 February 2022 and the US along with its allies slapped heavy sanctions on Russian oil imports, disrupting the global oil trade.
Must Watch: As Russia-Ukraine War Intensifies, Commodities Also Soars
Moreover, US President Joe Biden is all set to announce more Russian sanctions when he meets European leaders today in Brussels, including an emergency NATO meeting.
Also Read: Crude oil slides from multi-year highs as Iran talks rev up
Besides, a fresh rise in COVID-19 cases in China has curtailed the demand, providing relaxation to skying crude oil prices.
Bottom Line
Crude oil prices have been volatile on Thursday amid rising supply concerns ignited due to Russian oil embargoes, CPC terminal supply disruptions, and a potential revival of the Iran Nuclear deal.
Here’s how commodities performed in the last week click here
