Crude prices drop as Iran's response to US attack spares energy assets

From Yahoo Finance: 2025-06-23 15:22:00

Crude oil and gasoline prices plummeted Monday after Iran’s retaliation for the US attack on its nuclear sites was less severe than expected and spared US energy assets. Initial gains were erased when missile strikes on US bases in Qatar did no damage. Concerns remain regarding potential disruptions to oil supplies in the Middle East.

Iran has not attempted to close the vital Strait of Hormuz, which handles 20% of the world’s daily crude and LNG shipments. However, Iran’s parliament called for its closure, although Supreme Leader Khamenei’s approval is required. Energy research firm Kpler Ltd. warned that a closure could cause oil prices to spike temporarily to $120-$150 per barrel.

OPEC+ agreed to increase crude production by 411,000 bpd for July to address a global oil glut. Further output hikes are expected, with Saudi Arabia signaling additional increases to reduce prices and discipline overproducing members. OPEC+ aims to gradually restore 2.2 million bpd of production, with full production cuts not expected until September 2026.

Gasoline prices are supported by projections of record Fourth of July travel, indicating stronger demand. Tariff concerns persist as President Trump plans to impose unilateral tariffs on trading partners. A decline in oil stored on tankers and favorable EIA reports also impact oil prices positively.

Baker Hughes reported a decrease in active US oil rigs to a 3-3/4 year low, reflecting a trend of declining rig numbers. US crude oil inventories remain below seasonal averages. These factors, along with ongoing geopolitical tensions, continue to influence oil prices.



Read more at Yahoo Finance: Crude Prices Plunge as Iran’s Retaliation Misses Energy Assets