Oil price goes down: will the Iranian oil shipment to Lebanon create another crisis?

 

Crude oil markets Thursday

The price of crude oil was substantially down on Thursday with WTI and Brent hitting as low as 67.27 and 66.11 respectively as of 17:30 GMT. Both benchmarks lost over 3.3% in a day.

The outbreaks of the Delta variant of the Coronavirus, coupled with weak economic data from China, have resulted in the fall, which has been continuing for the week.

The speculation about the end of the US stimulus package, meanwhile, has added yet another dimension to the collective anxiety of both the investors and traders alike.

In the current circumstances, analysts are not in a position to predict the short-term progress – or decline - in the sector either.

The Arabic media, meanwhile, says a tanker with Iranian oil is going to crisis-hit Lebanon, citing an declaration from the leader of Hezbollah, the Iranian-backed militant group in Lebanon. Since Iran is still under US-led sanctions, how – and when - it will reach Lebanon is anybody’s guess.

Since the attack on the Israel-registered tanker in the Gulf of Oman, the tension in the region has remained high. Whether the move by the Hezbollah is an act of flexing the military muscles or addressing a dire economic need remains to be seen; the debacle in Afghanistan has the potential to embolden the militant outfits in the region – and beyond.

Up until the time of writing this piece, the US Navy has not said anything in response to Hezbollah’s move. They may be watching the evolving scenario with a heavy focus, though.

All in all, the climate of anxiety does not seem to go away soon so that the crude oil markets can breathe a long sigh of relief. It may take a considerable time before dust settles down.

 

 

 

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