Kolkata: Crude oil prices inched up in early trade on Thursday, even as Iran assessed the US proposals to end the war in the Gulf which has sent shcok waves in the energy market, the likes of which has never been seen before, analysts have pointed out. Brent crude futures rose 1.21% to reach $103.46 a barrel, while West Texas Intermediate crude futures inched up in excess of $1 to reach $91.42 a barrel.
According to reports, despite early reports of turning down the 15-point proposal sent by the Trump administration to end the war, Teheran still appears to be reviewing the proposal for a ceasefire. A ceasefire will be the first step of ending the energy crisis that has gripped the world since military conflict erupted between Iran and the US-Israel combine on Feb 28.
Drones hit Russia’s oil assets
Reuters reported that Russia has been forced to cut down on crude oil production after Ukranian drones hit some of its oil assets. The hit may cost Russia dear as the crude oil generates one of the key sources of revenue for the Putin administration. Moreover, Russia was enjoying the elevated prices of crude oil that is ruling above $100 a barrel following Iran closing the Strait of Hormuz through which moves as much as 20% of the oil tankers.
According to reports, Ukraine has intensified drone attacks on Russia’s oil and fuel export infrastructure. And it has successfully hit three of Russia’s major western oil export ports. The impact could have cut off about 40% of the country’s crude oil export capacities. Russia is the world’s send biggest oil exporter and the disruption is being claimed to be the most severe in modern times in the ocuntry.
Hormuz chokepoint continues
As Iran contiunues to restrict the movement of chips through the Strait of Hormuz, the world keeps reeling under crisis of crude oil and natural gas supplies. In fact, the closure of the inportant stretch of water has created more disruption in natural gas upplies than that of crude oil.
While some NATO allies and Japan have agreed to chalk out how to defreeze the ship movement through the Strait of Hormuz, Donald Trump has threatened Iran with severe strikes if its leaders do not accept that Iran has been “defeated militarily”. Piblicly some of Teheran’s officials have scoffed at Trump’s statement on a five-day pause of strikes on Iran which he posted on Monday. However, Iran is yet to formally turn down Washington’s proposal which was delivered through Pakistan.