Written by: Suhaib Shams
Slight decline in oil prices amid ongoing geopolitical risks and energy supplies
Global oil prices witnessed a noticeable decline after a sharp upward wave recorded during last week's trading, as West Texas Intermediate crude prices fell below the $100 per barrel mark, while Brent crude retreated below the $16 level. Despite this relative decline, prices maintained the largest share of their recent gains, which amounted to about ten percent, with direct support from the escalation of conflicts and geopolitical tensions in both the Middle East and Eastern Europe, which keep fears of global supply disruptions at very high levels.
In Middle East developments, confrontations and clashes between the Kingdom of Saudi Arabia and the Iran-backed Houthi group continue without any signs of de-escalation. These developments included the crash of a Saudi helicopter in an area close to the Yemeni border, along with the Houthi group targeting the city of Yanbu, which constitutes a vital and main center for oil exports. In addition, the vital Strait of Hormuz corridor witnessed an incident where three oil tankers were damaged during the weekend, amidst the announcement by the Iranian Islamic Revolutionary Guard Corps navy that the corridor is closed and that the passage of ships has become restricted to obtaining prior permission from it.
On the European front, Ukrainian attacks led to widespread fires breaking out at an oil export terminal and storage facility in the Russian city of St. Petersburg, coinciding with Kyiv launching a wide series of attacks using drones in one of the largest airstrikes against Russian targets since the beginning of the conflict.
In political and economic affairs related to the markets, US President Donald Trump stated that an agreement regarding diesel exports with Russia has been reached. Trump indicated that the imposition of an additional sanctions package has been postponed to avoid any negative impact that might threaten the course of ongoing peace talks with Ukraine.
