Data from the London Stock Exchange Group and traders showed on Monday that the price of crude oil shipments in spot transactions to Europe reached a record high of nearly $150 a barrel.
Oil prices jumped above $100 a barrel for June delivery, as the US Navy prepared to take control of shipping in the Strait of Hormuz, a move that could limit Iranian oil exports after Washington and Tehran failed to reach an agreement to end the war.
Brent crude futures rose $7.01, or 7.36%, to $102.21 a barrel, while U.S. West Texas Intermediate crude futures reached $104.87, up $8.30, or 8.59%, after falling 1.33% in the previous session.
For his part, oil market expert Mohammed Al-Shatti told Al-Arabiya that the rise in oil prices by more than 7% is a natural and justifiable reaction to the failure of negotiations and the declaration of the blockade.
He added that the market is waiting to see the effectiveness of the naval blockade on Iranian ports before taking a stronger price direction.
Despite the stalemate, shipping data showed that three fully laden supertankers passed through the Strait of Hormuz last Saturday. They appear to be the first vessels to leave the Gulf since the ceasefire agreement was reached last week.
Shipping data from the London Stock Exchanges Group revealed that oil tankers are avoiding the Strait of Hormuz ahead of the planned US takeover of the strait.
Gas imports
Imports of liquefied natural gas in Asia have fallen to their lowest level in six years, as conflict in the Middle East chokes off supplies and forces buyers to reduce consumption.
The 30-day moving average for net shipments to the region fell below 600,000 tons over the weekend, its lowest level since June 2020, according to ship-tracking data compiled by Bloomberg. That was when the coronavirus pandemic slashed gas demand across Asia.
Fuel bills
European Commission President Ursula von der Leyen said that EU member states should coordinate with each other on energy prices, noting that Europe’s fossil fuel import bills have risen by 22 billion euros ($25.7 billion) since the outbreak of the Iran war.
The President of the European Commission urged EU countries to develop the nuclear energy sector because of the crisis surrounding Iran, adding that restoring freedom of navigation in the Strait of Hormuz is of paramount importance.
Von der Leyen added: “The continued closure of the Strait of Hormuz is causing immense damage, and restoring freedom of navigation through it is of paramount importance to us.”
Chinese companies
Morgan Stanley revealed that a group of Chinese companies could be among the biggest beneficiaries if the situation in the Middle East stabilizes, given that part of their revenue depends on the region’s markets.
This assessment is based on the premise that a reduction in tensions, particularly those related to vital energy corridors such as the Strait of Hormuz, would revitalize global trade and improve the flow of goods and investments.
The bank explained that geopolitical crises usually lead to disruptions in supply chains, a decline in foreign investment, and a decrease in consumer spending.
Morgan Stanley predicted that companies benefiting from the easing of restrictions would include sectors such as energy, industrial equipment, technology, transportation, and logistics.
China was able to mitigate the shock caused by the war in the Middle East on the energy level, thanks to its reserves and the diversification of its supply sources.
Kpler, a marine data analytics firm, noted that the Asian economic giant, which imports more oil than it exports, obtained more than half of its crude oil imports from the Middle East last year by sea.
Kepler analyst Moyo Xu said that growing concerns among Chinese leaders about the geopolitical situation in recent years have prompted them to develop their energy storage capabilities and strengthen strategic reserves.
Dollar highest level in a week
The dollar rose to its highest level in a week amid a broad rally against most rival currencies in Asian trading.
The dollar index, which measures the performance of the US currency against a basket of six currencies, rose 0.5% to 99.187, its highest level since April 7.
The euro fell 0.5% to $1.1667, while the British pound also declined.
The dollar fell 0.6% to $1.3383, while the Australian dollar dropped 0.8% to $0.7014 and the New Zealand dollar declined 0.7% to $0.5798.
European stock markets decline
European stocks fell as expectations of a quick resolution to the Middle East crisis faded, with the pan-European STOXX 600 index dropping 0.7% to 610.44 points. Local stock exchanges in the region also declined, with Germany’s DAX index falling 1% and Britain’s FTSE 100 index dropping 0.4%.
