Oil rates surge after death of Iranian leader
Date
5/21/2024 3:08:11 AM
(MENAFN) Oil rates surged on Monday following confirmation from Tehran regarding the tragic deaths of Iranian President Ebrahim Raisi, Foreign Minister Hossein Amir-Abdollahian, and several other officials in a helicopter crash in the northwestern province of the country.
At 10:44 a.m. local time (0744 GMT), the international benchmark brent crude reached USD84.24 per barrel, marking a 0.31 percent increase from the previous trading session's closing price of USD83.98 per barrel. Similarly, the American benchmark West Texas Intermediate (WTI) traded at USD79.81 per barrel at the same time, reflecting a 0.29 percent rise from its previous session's closing price of USD79.58 per barrel.
The tragic incident occurred when the helicopter carrying the Iranian president, foreign minister, and their delegation crashed in the East Azerbaijan region of northwest Iran on Sunday afternoon. Despite a prolonged search operation hindered by adverse weather conditions, Iranian Deputy President for Executive Affairs Mohsen Mansouri announced in a statement that all passengers aboard, including the president, foreign minister, accompanying delegation, and helicopter crew, had unfortunately perished.
Concerns over potential disruptions in oil supply due to the political ramifications in the oil-producing nation have fueled apprehensions, thus contributing to the surge in oil prices. The market also awaits insights into how these developments may impact decisions at the upcoming June 1 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+.
According to the latest report from OPEC, Iran currently produces over 3 million barrels of oil per day.
Additionally, expectations of interest rate cuts by the US Federal Reserve (Fed) have influenced oil prices. With a 65 percent probability forecasted for a Fed interest rate decrease in September, financial markets are adjusting to this projection, thereby supporting trade and prices. A weaker US dollar exchange rate further amplifies this effect, as it makes oil trading more affordable for holders of other currencies.
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