Fuel Oil Prices Rise, Surpass $100 Per Barrel
Global fuel oil prices have increased by about 20 percent in the world market, reaching the highest level since July 2022. The main reason behind this is the conflict between Iran, the United States, and Israel, which has further tightened the supply system and created concerns about prolonged disruption to shipping through the Strait of Hormuz.
On Monday, Brent crude futures rose by $18.35 or 19.8 percent to reach $111.04 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures increased by $15.27 or 16.8 percent to $106.17 per barrel. At the beginning of the session, it had risen by $20.34 or 22.4 percent to reach $111.24 per barrel. Last week, Brent increased by 27 percent and WTI rose by 35.6 percent.
Due to the impact of the Iran war, consumers and businesses worldwide will have to face rising fuel prices for weeks or months. In such a situation, suppliers are struggling with damaged facilities, supply chains are being disrupted, and the risks to shipping are increasing.
Top oil-exporting country Saudi Arabia is increasing oil shipments from the Red Sea, but according to shipping data, this is not enough to make up for the shortage of oil coming through the Strait of Hormuz.
Daniel Hynes, Senior Commodity Strategist at ANZ, said oil prices have risen because producers in the Middle East are reducing production due to oil accumulating in storage. If the situation reaches a point where they have to shut down oil wells, not only will production decrease, but it will also take time for supply to normalize again even after the conflict ends. As a result, prices will remain high for a long period.
