Oil prices remain stable in early trade

5 Feb 2024 , 10:39 AM

After steep declines the previous week, oil prices steadied in early Asian trading on Monday as the United States prepared to launch further strikes on organisations supported by Iran and efforts to achieve a truce in the Israel-Palestine conflict continued.

U.S. West Texas Intermediate futures were unchanged at $72.28 a barrel by 01:31 GMT, while Brent oil futures increased by 8 cents to $77.41.

Last week, both benchmarks saw a roughly 7% decline. They dropped 2% on Friday in response to better-than-expected U.S. jobs statistics that raised the possibility that interest rate reductions may occur sooner than anticipated as well as developments in the cease-fire talks between Israel and Hamas.

After a deadly attack on American forces in Jordan, the United States indicated it will launch more strikes against organisations backed by Iran in the Middle East; still, investors continued to be cautious about any escalation in the conflict in the region.

Along with this, the United States of America (USA) launched 36 strikes on Saturday against the Houthis in Yemen, who are backed by Iran. Their attacks on cargo vessels have caused disruptions to international oil trading routes, though supply has remained mostly unaffected.

The U.S. Department of Justice announced charges and seizures related to evading sanctions on Friday. The network of oil traffickers is believed to be the source of funding for Iran’s Islamic Revolutionary Guard Corps.

On board the crude tanker Abyss, which was stranded in the Yellow Sea on its way to China, it found and confiscated almost 520,000 barrels of Iranian oil that was subject to sanctions.

For the most of 2023, Iran exported 1.2 million to 1.6 million barrels of crude oil per day, or 1% to 1.5% of the world’s total oil output.

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