Regional Tensions Bolster Middle East Spot Oil Shipments Value

Spot crude oil shipment prices in the Middle East have recovered, now surpassing futures contract levels for upcoming months, oil sector sources reported on Tuesday. This surge follows escalating attacks between the United States and Iran, raising concerns over oil exports and shipping through the strategic Strait of Hormuz, consequently prompting Asian buyers to seek alternative supply sources. The latest five-month wave of hostilities began with a U.S. strike on Iran after a ship attack last week; the U.S. launched fresh attacks recently. Traders noted monthly differentials for spot benchmark Dubai crude shifted to backwardation, with spot prices today approximately one dollar per barrel higher than futures for later months. This transition occurred after three weeks of contango, where futures prices had exceeded spot shipment rates. Global crude supplies had improved over the past three weeks as several tankers traversed the Strait under a temporary U.S.-Iran agreement. Nevertheless, Kepler's vessel tracking data revealed only five ships—carrying oil, chemicals, and dry bulk—crossed the Strait on Monday, mostly via the Iranian route, with no crude oil or liquefied natural gas (LNG) tankers entering.