Following trading on the London ICE exchange, the price of September Brent crude oil futures was $97.07 (+3.19%), while on the New York Mercantile Exchange NYMEX, August WTI crude oil futures rose to 89.01 (+2.51%).
Oil prices continued their intensive growth today after the US resumed military operations in Iran on Monday, and the latter, in turn, struck neighboring countries; the price of September Brent crude futures rose by 4.14% relative to the previous close. Since Monday, energy prices have risen by almost 8%.According to IEA estimates presented earlier in its monthly report, global oil supply in June grew by 4.1 million barrels per day (bpd) to 98.8 million bpd. The increase is driven by the resumption of shipping in the Strait of Hormuz after the signing of a framework ceasefire agreement between Iran and the US. At the same time, oil refining grew by only 1.5 million bpd to 79.2 million bpd, and was 6 million bpd below the level of June last year. The growth in refining, according to the IEA, occurred partly due to Asian refineries, while export plants in the Middle East have not yet resumed work. Therefore, oil and gas companies are forced to accelerate repair work to return refinery utilization to the target 80–84%, and revise capital expenditure plans. According to GMI data, the global oil refining market exceeds $7.2 trillion and continues to grow steadily, fueled by the developing markets of the Asia-Pacific region. At the same time, China has significantly reduced its oil refining volumes to compensate for the drop in imports due to the conflict with Iran, and refineries across Asia have also been forced to reduce production due to limited access to crude oil.
The total volume of crude oil and petroleum product exports from the US has begun to decline as refineries satisfy growing domestic demand. Weekly exports fell to 10.7 million barrels per day last week, the lowest figure since March, following a record level of 14.2 million barrels per day in April.
Amid falling domestic inventories and peak summer fuel demand, US capabilities to supply the world look increasingly limited. On the other hand, feedstock-starved Asian and Middle Eastern capacities, against the backdrop of high prices, may face either low processing margins (which will reduce investment) or their economies' limited capacity to handle high oil prices. This, coupled with the depletion of inventories in the US and a shortage of petroleum products there, could reduce or balance the demand for primary energy sources and lead to lower projected economic growth indicators, which is only uncritical from the perspective of reducing the carbon footprint and environmentalists, but could limit growth primarily in developing markets and lead to an increase in the regional component of hydrocarbon trade and further diversification of the energy market.
At the same time, gas prices are also rising following oil and testing maximum thresholds. The cost of August natural gas futures at the ICE hub (TTF) in the Netherlands exceeded $756 per 1,000 cubic meters (or about €63 per MWh) amid geopolitical tensions. On the NYMEX exchange, natural gas exchange prices (CFD) are trading near $2.96 per 1 MMBtu (million British thermal units). $105.9 thousand per cubic meter, the price difference compared to the European markets is due to differences in pricing.