Oil tops $100 as big Middle East producers cut output amid Iran war
Crude oil prices rose above $100 a barrel on Sunday after major Middle East producers cut production as the critical Strait of Hormuz remains closed due to the Iran war.
West Texas Intermediate It rose 18.98%, or $17.25, to $108.15 a barrel as of 6:12 p.m. ET. Global benchmark Brent It advanced 16.19%, or $15.01, to $107.70. U.S. crude oil rose nearly 35% last week, marking its biggest gain in futures history since 1983.
Kuwait, OPEC’s fifth largest producer, announced on Saturday that it would make precautionary cuts in oil production and refinery production due to “Iran’s threats to the safe passage of ships through the Strait of Hormuz.” State-owned Kuwait Oil Company did not provide detailed information on the extent of the cuts.
Production in Iraq, OPEC’s second largest producer, has virtually collapsed. Production at the three main southern oil fields fell 70 percent to 1.3 million barrels a day, three industry officials said. Reuters Sunday. These fields were producing 4.3 million barrels per day before the Iran war.
The United Arab Emirates, OPEC’s third-largest producer, also said on Saturday it was “carefully managing overseas production levels to meet storage requirements.” Abu Dhabi National Oil Company (ADNOC) said its onshore operations were continuing normally.
Gulf Arab countries are cutting production because they run out of storage space because oil barrels have nowhere to go due to the closure of the Bosphorus. Tankers do not want to pass through the narrow waterway because they are worried that Iran will attack them. Approximately 20% of world oil consumption is exported through the Bosphorus.
War shows no signs of abating despite Trump’s intervention claim According to reports, this agreement had “already been won”, with Iran nominating Ayatollah Khamenei’s son Mojtaba as its new supreme leader.
Energy Minister Chris Wright said on Sunday that traffic in the Bosphorus will continue after the United States eliminates Iran’s ability to threaten tankers.
“It won’t be long before you see a more orderly resumption of ship traffic in the Strait of Hormuz,” Wright said in an interview with CNN. “We’re nowhere near normal traffic right now. It’s going to take some time. But again, at worst it’s a few weeks, not months.”
