By Adedapo Adesanya
Brent crude price soared by $1.30 or 1.5 per cent to $90.65 per barrel on Thursday as the market extended gains amid geopolitical tensions and output cuts, which outweighed caution about US Federal Reserve rate cuts.
Also, the US West Texas Intermediate (WTI) futures appreciated by $1.16 or 1.4 per cent to $86.59 per barrel after prices got support in recent days from the heightened geopolitical tensions and potential supply risks.
On Thursday, this continued following news reports that Israeli embassies across the US have been placed on high alert due to increasing threats of an Iranian attack on Israeli diplomats.
Iran, which is the third-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), has vowed revenge against Israel for an attack on Monday that killed high-ranking Iranian military personnel.
A strike on Monday killed two Iranian generals and five military advisers at Iran’s embassy compound in Syria. This attack comes as Israel accelerates a long-running campaign against Iran and the armed groups it backs.
Iranian Supreme Leader, Mr Ayatollah Ali Khamenei, has vowed revenge and analysts say it could unleash its proxies on US forces in order to use them to strike Israel directly or ramp up its nuclear programme.
The US on Tuesday bluntly warned Iran against attacking its forces, saying it will not hesitate to retaliate.
In the same vein, the US issued its strongest public rebuke toward Israel on Thursday since the start of its war with Hamas, warning that US policy on Gaza will be determined by whether Israel takes steps to address the safety of Palestinian civilians and aid workers.
It also imposed new Iran-related counter-terrorism sanctions against Oceanlink Maritime DMCC and its vessels, citing its role in shipping commodities on behalf of the Iranian military.
Prices were also supported after the US Secretary of State, Mr Antony Blinken, said Ukraine would eventually join NATO as support for the country remains “rock solid” among member states.
Oil’s recent gains have also followed Ukrainian attacks on Russian refineries that cut fuel supply.
Also, Mexico’s state energy company Pemex requested its trading unit to cancel up to 436,000 barrels per day of crude exports this month as it prepares to process domestic oil at the new Dos Bocas refinery.
Meanwhile, OPEC+ kept oil supply policy unchanged on Wednesday and pressed some countries to boost compliance with output cuts.
The group said some members would compensate for oversupply in the first quarter. It also said Russia would switch to output rather than export curbs.