Oil Declines as US, Israel Seek to Ease Concerns Over Iran War

Oil dropped from its highest close since July 2022, as the leaders of the US and Israel sought to reassure investors rattled by damage to major Persian Gulf energy facilities.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Oil dropped from its highest close since July 2022, as the leaders of the US and Israel sought to reassure investors rattled by damage to major Persian Gulf energy facilities.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Brent crude fell toward $107 a barrel, while West Texas Intermediate for May was around $94.

President Donald Trump told reporters he’s “not putting troops anywhere” after being asked about the possibility of deploying US ground forces, while Prime Minister Benjamin Netanyahu said Israel would refrain from more attacks on Iranian energy facilities.That followed the biggest day of strikes on energy assets since the war started almost three weeks ago, including extensive damage to the world’s biggest liquefied natural gas plant in Qatar that will take years to repair. Brent crude has gained almost 50% this month, outpacing advances in the more regional US benchmark WTI, as the near-complete closure of the Strait of Hormuz hampered supply from the region. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.“Price bias for here stays asymmetric, with Brent potentially remaining higher as long as Gulf infrastructure and Hormuz risks are still live,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “WTI could be choppier and more capped because any spike invites US policy response or direct interventions in the oil markets.” On Thursday, Trump tried to downplay the recent jumps in oil prices during an appearance with Japan’s prime minister. “I thought there was a chance it could be much worse,” he said. “It’s not bad, and it’s going to be over with pretty soon.”US efforts to tame prices, including the release of strategic reserves that must be returned with interest at a later date, have widened the discount of WTI to Brent to about $13 a barrel. That’s set up an unusual situation where Brent is set for a weekly gain of about 4%, while WTI is on a path to a 5% drop. In other energy markets, European natural gas futures surged to almost double their pre-war level. Fuel prices also climbed, underscoring the wider inflationary risks from the conflict.Netanyahu told reporters Thursday that Israel acted on its own when its jets bombed Iran’s giant South Pars gas field a day earlier, but that it would hold off from additional strikes on energy. He declined to give a timeline on ending the conflict, but said he could “see this war ending a lot faster than people think.” Strikes continued on Friday. In Kuwait, several units at the Al Ahmadi refinery were shut after a drone attack caused a fire, state-run news agency Kuna said in a twitter post. The OPEC producer had earlier begun lowering processing rates at its refineries as their storage tanks fill up. Meanwhile, Treasury Secretary Scott Bessent said it’s likely Iran’s regime will probably collapse within itself. He also said the US is looking to remove sanctions on Iranian oil in an effort to lower surging energy prices triggered by the war in the Gulf, and could also look at a unilateral release of national reserves.The White House also doesn’t plan to ban the export of oil and gas, a Trump administration official said Thursday, following a meeting between Vice President JD Vance and oil executives. The industry had warned such a move would only hurt producers.Offering temporary relief for markets, the International Energy Agency issued details on emergency crude oil commitments by member nations. Japan, Canada and South Korea will be among the biggest contributors to the broad release of stockpiles.The conflict has inflicted the biggest supply disruption in the history of the global oil market, forcing producers around the Gulf to collectively shutter roughly 10 million barrels of daily output, according to the International Energy Agency.Saudi Arabia, the biggest crude exporter, has a base case that sees prices soar past $180 a barrel if the disruptions in energy supplies because of the war in Iran last until end-April, the Wall Street Journal reported, citing unidentified oil officials. “As the fighting and the conflict continues and energy infrastructure continues to be in play, it’s going to be very hard for the markets to calm down,” Rebecca Babin, a senior energy trader at CIBC Private Wealth Group LLC, said on Bloomberg Television. “It just becomes a game of what is the next target, and is the damage that’s happening short term or long term, and what does that mean? So I honestly think we’re in for more volatility.”—With assistance from Charles Gorrivan.Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.