Geopolitical risk has dominated oil markets this week, with both WTI and Brent up by roughly 8% since the start of the week when Iran fired at least 180 missiles at Israel in retaliation for Israeli strikes in Lebanon, OilPrice said.

Oil prices are set to post a solid $6 per barrel week-on-week increase as ICE Brent futures entrenched themselves around $78 per barrel. Iran’s missile barrage on Israel and a potential retaliatory action from the Netanyahu government boosted the geopolitical risk premium, in fact so much that the oil markets didn’t even notice the lifting of Libya’s oil embargo, returning some 700,000 b/d of crude to the market. Israel restarts gas fields after Iran attack. 

Gas production from Israel’s Leviathan and Tamar fields has restarted after a one-day shutdown prompted by Iran’s large-scale missile attack, with US oil major Chevron reporting there was no physical damage to the Leviathan platform and the field. 

OPEC calls out Wall Street Journal. In a rare move for the market, OPEC issued a statement denouncing a Wall Street Journal article that alleged Saudi Arabia’s oil minister warned of oil prices dropping to $50 per barrel if the oil group’s members do not stick to production targets, calling it ‘inaccurate and misleading’. 

Middle East buys up Europe’s industrial giants. ADNOC, the national oil company of the United Arab Emirates, has entered into an investment agreement to buy Germany’s chemical giant Covestro in a deal worth €11.7 billion, assessed at a premium of 54% over the firm’s pre-announcement share price.

Kazakhstan continues to defy OPEC+ quotas. One of the most notorious overproducers of OPEC+, Kazakhstan produced 6.55 million tonnes of oil last month, equivalent to 1.64 million b/d, suggesting that the Central Asian country’s vows to curb output have failed as it exceeds its quota by 170,000 b/d.

/OilPrice/