Iran conflict increases U.S. Gulf Oil prices to their highest level since 2020
The price of U.S. Gulf Coast Heavy Grades continued to rise?on Friday, as the Iran Conflict prompted several Middle -Eastern producers to reduce production. This prompted?buyers and?sellers to grab?U.S. barrels.
Brokers said that the price of Mars sour crude, a flagship crude produced by the U.S. Gulf of Mexico, and preferred by refiners worldwide, traded Friday at an $11 premium over U.S. benchmark West Texas Intermediate crude (WTI). This was the highest price since April 2020 and an increase of $4 on Thursday. It was $1.50 higher just a week earlier.
Other heavy grades like the Heavy Louisiana Sweet
Brent crude settled at $92.69 per barrel on Friday, the highest price since October 2023. The 'effective closure of Strait of Hormuz' has forced a number of countries, including Iraq, to reduce their output. The'strait' is the main route for heavy and medium sour crude from Persian Gulf and these flows are now largely blocked. A trader reported that the additional production cuts announced by Kuwait on Friday helped to boost Mars prices.
The price of U.S. Gulf heavy and medium crude oil is rising rapidly, and this is a natural substitute for refiners who rely on them. Matt?Smith, Kpler's lead Americas analyst, said that buyers in Asia are scrambling to buy more.
Tim Snyder, Matador Economics' chief economist, said that the price of crude oil was driven by the disruption in supply caused by the war.
Snyder stated that "in the short-term, we will continue to witness these grades increase until the Strait of Hormuz opens up." (Reporting from Siddharth Cavale in New York, Georgina McCartney and David Gregorio in Houston)
(source: Reuters)
