Oil prices continued their rise on Monday due to political uncertainty in major producing countries after Iran’s president died in a helicopter crash and Saudi Arabia’s crown prince canceled a trip to Japan due to the king’s health problems.
Brent rose 41 cents, or 0.5%, to $84.39 a barrel by 0632 GMT, after rising to $84.43, its highest since May 10.
West Texas Intermediate (WTI) crude oil for June rose 23 cents to $80.29 a barrel, after previously hitting its highest level since May 1 at $80.35. The June contract expires Tuesday and the more active July contract is up 31 cents, or 0.4%, at $79.89.
While Brent closed the previous week with a nearly 1% increase, its first weekly gain in three weeks, WTI rose 2% on improving economic indicators from the United States and China, the world’s largest oil consumers.
Iranian President Ibrahim Raisi, long seen as a potential successor to Supreme Leader Ayatollah Ali Khamenei, died in a helicopter crash in mountainous terrain near the Azerbaijani border, it was announced on Monday.
Saudi Arabian Crown Prince Mohammed bin Salman’s visit to Japan, which was planned to start on Monday, was postponed due to the health problem of his father, the king.
News of the King’s deterioration in health has further increased the layer of uncertainty that was already present in the energy markets this morning, following the news of the death of the Iranian President.
Last week in China, the loosening of mortgage rules, the reduction of deposits, and the real estate measures announced also contributed to the market.
However, despite the volatility in the region, oil prices have moved very little. The oil market remains largely in a range, and without any new catalysts, we will probably have to wait for the OPEC+ production policy to be clarified before we can move out of this range.
The Organization of Petroleum Exporting Countries and its allies called OPEC+ are scheduled to meet on June 1.
Having become accustomed to Crown Prince Mohammed Bin Salman’s leadership in the energy sector, the market appears increasingly insensitive to developments on the geopolitical front due to the likely large amount of spare capacity OPEC has.
Regardless of the King’s health problem, continuity is expected in the Saudi strategy.
In the US, Washington took advantage of the recent drop in oil prices and said it was buying 3.3 million barrels of oil at $79.38 per barrel late last week to help replenish the Strategic Petroleum Reserve after a massive sell-off from inventory in 2022.
