Oil Prices Steady Amid Geopolitical Uncertainty and Market Speculations
Political Uncertainty in Major Producing Countries
Oil prices steadied on Monday as political uncertainties in major oil-producing countries created a balancing act in the market. Brent crude dipped 24 cents to $83.74 a barrel by 0958 GMT, while U.S. West Texas Intermediate crude for June, set to expire on Tuesday, edged 33 cents lower to $79.73 a barrel. The more-active July contract was down 28 cents at $79.30.
Iran's President Dies in Helicopter Crash
Iranian President Ebrahim Raisi, known as a hardliner and potential successor to Supreme Leader Ayatollah Ali Khamenei, died in a helicopter crash near the Azerbaijan border. Despite this sudden event, Iranian oil policy is expected to remain stable as Khamenei holds ultimate power over state matters.
Saudi Crown Prince Postpones Japan Visit
Saudi Arabian Crown Prince Mohammed bin Salman postponed his visit to Japan due to King Salman's health issues. Energy analyst Saul Kavonic of MST Marquee noted that the market is accustomed to the Crown Prince's leadership in the energy sector, and continuity in Saudi strategy is anticipated despite the health concerns.
European Geopolitical Tensions
In Europe, the Slavyansk oil refinery in Russia's Krasnodar region was damaged in a weekend drone attack, adding to the geopolitical tensions. Russia has reported an increase in Ukrainian attacks since opening a new front in the Kharkiv region earlier this month.
Market Reactions and OPEC+ Meeting
"The oil market remains largely rangebound and without any fresh catalyst, we will likely have to wait for clarity around OPEC+ output policy to break out of this range," said Warren Patterson, head of commodities strategy at ING. The Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, are scheduled to meet on June 1.
Patterson also commented on the market's reaction to geopolitical developments, stating, "The market appears increasingly numb to developments on the geopolitical front, likely due to the large amount of spare capacity OPEC is sitting on."
