Oil prices declined on Wednesday following a multi-day rally, as investors assessed the implications of the UAE's surprise decision to withdraw from the Organization of the Petroleum Exporting Countries (OPEC). However, supply disruptions resulting from the war with Iran continue to support the market.
اضافة اعلان
Brent crude futures for June delivery slipped 1 cent to $111.25 per barrel by 04:13 GMT, after rising for the previous seven sessions. The June contract expires on Thursday, while the more active July contract fell 28 cents to $104.12.
Impact of UAE’s Withdrawal and Supply Outlook
Anne Pham, a senior analyst at the London Stock Exchange Group, stated that Wednesday’s slight dip is likely tied to the UAE's unexpected decision to leave OPEC. This move suggests an improved outlook for supply once the country is freed from its mandatory production quotas.
"However, this impact is not immediate, as delivery of additional barrels may not be possible in the near term due to the ongoing blockade of the Strait of Hormuz," Pham added. "Thus, while prices dropped slightly, this appears to be a correction of previous gains, as Brent remains high at around $110 per barrel."
Geopolitical Pressures and Blockade Status
The Wall Street Journal cited U.S. officials saying that President Donald Trump has instructed aides to prepare for a prolonged blockade of Iran. The report noted that Trump prefers to maintain pressure on Iran's economy and oil exports by blocking shipping to and from its ports.
Despite a ceasefire in the U.S.-Israeli war on Iran, the conflict has reached a stalemate as both sides attempt to reach a formal end to the hostilities. Iran has closed the Strait of Hormuz—through which approximately 20% of global oil and LNG supplies pass—while the United States has imposed a blockade on Iranian ports.
Yang An, an analyst at Haitong Futures, commented: "The recent surge in oil prices was driven by the blockade of the Strait. If Trump is prepared to extend the blockade, supply disruptions will worsen, continuing to drive oil prices upward."
US Inventory Data
The closure of the Strait continues to drive global inventory drawdowns. Market sources noted late Tuesday that American Petroleum Institute (API) data indicated a decline in U.S. crude stocks.
According to these sources, crude inventories fell by 1.79 million barrels for the week ending April 24. Gasoline stocks dropped by 8.47 million barrels, while distillate stocks decreased by 2.60 million barrels.
(Source: Reuters)
