Daily Times

Crude oil price fell for the second straight session on Tuesday as the market weighed the potential fallout from any fresh US sanctions on Iran’s oil exports.

As of 1320 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, slipped $0.70 (-0.80 percent) to reach $86.30 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.70 (-0.85 percent) to $81.20 a barrel.

On the other hand, the price of Arab Light increased by $0.58 (+0.66 percent) to reach $88.41 a barrel. Similarly, the price of Russian Sokol increased by $0.66 (+0.83 percent) to $80.12 a barrel. On the other hand, the price for Opec Basket increased by $0.17 (+0.19 percent) to $87.52 a barrel.

Both benchmarks had spiked more than $3 a barrel early on Friday, after explosions were heard in the Iranian city of Isfahan that was described as an Israeli attack, though gains were capped after Tehran played down the incident and said it did not plan to retaliate.

Meanwhile, EU foreign ministers agreed in principle on Monday to expand sanctions on Iran following Tehran’s missile and drone attack on Israel this month. The US Senate will begin considering a foreign aid package that includes sanctions on Iran’s oil exports that target ships, ports, and refineries that process Iranian oil. Investors this week are waiting for the release of US gross domestic product figures and March personal consumption expenditure data to assess the trajectory of monetary policy.

Whereas the short-term oil price outlook appears murky, leading oil agencies remain largely bullish about the long-term outlook. Last week, the International Energy Agency (IEA) published its latest monthly Oil Market Report (OMR), including its first detailed 2025 forecast. The Paris-based energy watchdog predicted that global oil demand in 2025 demand will be 1.147 mb/d higher than 2024 levels, higher than the 1.0 mb/d estimate it had released in June 2023. Other leading agencies have predicted even higher demand growth in 2025: the EIA forecast is 1.351 mb/d, the forecast of the Standard Chartered is 1.444 mb/d while the OPEC Secretariat has predicted a 1.847 mb/d increase in demand.