Despite initial concerns about potential supply disruptions, the market has calmed down as there have been no major impacts on oil production in the Middle East. The price of Brent crude oil hit a high of $92 per barrel last week but has since stabilized. Some oils, like Forties oil in the North Sea, are showing signs of price decline, indicating that global supply is currently abundant.
With refineries undergoing maintenance, increased oil production in the US, and some countries no longer interrupting production, the market is experiencing a surplus of oil. Libya’s oil output has recovered, and US crude oil exports to Europe have increased. Nigeria, Africa’s leading oil exporter, is struggling to find buyers for its oil, leading to price reductions by some energy companies.
Despite geopolitical risks, analysts believe that the current oil prices already reflect these factors. OPEC+ has ample production capacity to address any potential supply disruptions, further stabilizing oil prices. The International Energy Organization estimates that OPEC+’s spare capacity is sufficient to meet world demand. As a result, investors are feeling more confident that the market can withstand supply and demand fluctuations.
According to analysts, the conflict in the Middle East is having minimal impact on oil prices due to OPEC+’s abundant supply and spare capacity. On April 19th Brent and WTI crude oil prices initially surged after news of Israel attacking Iran but ultimately closed at the same level as the opening price because the conflict has not led to significant disruptions in oil supply in the region.
