Crude oil futures climbed to $89.50 per barrel on Tuesday, the highest level in more than a month, as renewed strikes in the Middle East extended the suspension of exports from the region. The United States launched a fresh wave of attacks against Iran after both sides exchanged strikes earlier in the week, escalating tensions despite Washington’s earlier indication that it would rely solely on economic measures against Tehran.
Tanker flows were expected to fall sharply, reversing the brief relief in crude and refined product prices that had followed reports that GCC countries would facilitate some exports. A stronger rebound in oil prices was capped, however, as major economies drew on strategic and commercial inventories in an effort to mitigate the impact of higher import costs. The US Strategic Petroleum Reserve fell to below 290 million barrels, its lowest level since 1982.
At the same time, China sharply reduced its crude oil imports, and refinery runs were cut by only 1.6 million barrels per day, suggesting a deliberate pullback in crude demand even as consumption of refined products remained relatively steady.