Oil prices rose as much as 3% on Thursday after Iran attacked multiple energy facilities across the Middle East following its attack on the South Pars gas field.
Dwayne Schnell 500px Plus | Getty Images
U.S. oil prices deepened after Treasury Secretary Scott Bessent said Washington could soon lift sanctions on Iranian crude stored in tankers in a bid to ease price pressure following Iran’s blockade of the Strait of Hormuz.
Brent crude oil, the international benchmark, fell 2% to $106 a barrel. US crude oil prices fell 1.56% to $94.64 per barrel.
“We could potentially lift sanctions on about 140 million barrels of Iranian oil at sea in the coming days,” Bessent told Fox Business Network.
He said returning sanctioned Iranian oil to the world market would help keep prices in check over the next 10 to 14 days.
Israeli Prime Minister Benjamin Netanyahu also told reporters that Israel supports U.S. efforts to reopen the Strait of Hormuz, according to the Telegram. He said Iran no longer has the capacity to enrich uranium or build ballistic missiles, adding that the war could end sooner than most expected.
Citi said the Iran conflict has caused prices for crude oil and related commodities to soar, raising its near-term price outlook.
The bank now expects Brent and WTI to rise to $120 per barrel over the next one to three months, and to $150 per barrel in a bullish scenario if turmoil intensifies.
Still, the base case scenario assumes that tensions ease within four to six weeks, with Brent returning to $70-$80 by the end of the year.
At the same time, major oil spreads have widened sharply, with Citi raising its Brent-WTI outlook to reflect rising transportation costs and strong US Gulf Coast demand for inland barrels.
Saudi oil officials predict that oil prices could exceed $180 a barrel if the Iran war continues into late April, The Wall Street Journal reported.
