Oil Prices Rise on Supply Outages, Iranian Counterproposal


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   VIENNA (DTN) -- Crude prices rebounded Thursday (3/26) morning as Iran 
signaled skepticism over peace talks with the U.S., casting doubts about a 
potential ceasefire to the month-long Middle East conflict that has shuttered a 
fifth of world oil supply.

   Israel, meanwhile, claimed to have killed Iran's navy chief Alireza 
Tangsiri, whom it said had overseen the blockade of the Strait of Hormuz, which 
was the artery for much of the Arab peninsula's oil. Iran did not immediately 
verify Tangsiri's death.

   Over in Europe, Russia had to halt oil exports from several ports that 
sustained damage from Ukrainian drone attacks, adding to global flow 
disruptions.

   Iranian foreign minister Abbas Araghchi said Wednesday (3/25) there were no 
talks with the U.S. but did acknowledge the exchange of messages via Pakistani 
mediators. He also rejected the idea of a temporary ceasefire, saying the 
country was focused on a permanent end to the conflict.

   By 8:25 a.m. ET, NYMEX WTI crude for May delivery was up $3.74, or 4%, at 
$94.06 bbl. ICE Brent crude for May delivery rose $4.65, or 5%, to $106.97 bbl.

   Among refined products, NYMEX ULSD futures for April delivery advanced 
$0.2227 to $4.2290 gallon, while NYMEX front-month RBOB futures edged higher by 
$0.0661 to $3.0785 gallon.

   The US dollar index strengthened by 0.27 points to 99.67 against a basket of 
foreign currencies.

   Oil prices retreated by 2% in the prior session after the U.S. sent Iran a 
15-point truce proposal, containing many of the same demands the country had 
previously adhered to under the JCPOA, or Joint Comprehensive Plan of Action. 
The U.S. unilaterally withdrew from the treaty, also known as the Iran nuclear 
deal, in 2018 under President Donald Trump's first term in office.

   Tehran countered the 15-point U.S. plan with a scaled down 5-point proposal 
that demanded international recognition over Iran's sovereignty over the Strait 
of Hormuz, and the payment of war reparations.

   Loadings at Russia's Baltic Sea export hubs Primorsk and Ust-Luga were 
halted Wednesday after a wave of Ukrainian drone attacks. The ports are the 
main outlets for Russian diesel and Urals crude exports. Russia's Druzhba 
pipeline sustained damages in January, and loadings at the Black Sea port of 
Novorossiysk have been scaled back since a Ukrainian drone attack in early 
March.

   Put together, the outages remove some 2 million bpd of crude and product 
supply from the market, adding to the at least 15 million bpd which remained 
shut in the Persian Gulf after Saudi Arabia and the UAE rerouted part of their 
production from the Hormuz strait to ports in the Red Sea and the Gulf of Oman.




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