On Monday, April WTI crude oil closed at $71.35 per barrel, up 6.28%, marking an 8.25-month high, while April RBOB gasoline rose 3.72% to $2.38 per gallon, reaching a 19-month high. The surge in prices is attributed to escalating tensions following joint U.S. and Israeli attacks on Iran and subsequent retaliatory drone strikes by Iran.
As a result of halted tanker traffic in the Strait of Hormuz, which facilitates roughly 20% of the world’s oil supply, Goldman Sachs projects an $18 per barrel risk premium for crude oil. Meanwhile, OPEC+ announced an increase in production by 206,000 barrels per day in April, attempting to offset the previous cuts of 2.2 million barrels per day from early 2024.
Current floating storage data reveals 290 million barrels of Russian and Iranian crude, more than a 50% increase from last year. Additionally, Venezuelan crude exports rose significantly to 800,000 barrels per day in January, further impacting global oil supply dynamics. The U.S. Energy Information Administration also reported a slight decline in U.S. crude oil production to 13.702 million barrels per day as of February 20.
