 "Conflict in West Asia remains growing risk for energy markets: J P Morgan")
J.P. Morgan on Tuesday said that the growing conflict in the Middle East remains a growing risk for energy markets.
Recent attacks on vessels in the Red Sea by Iranian-backed Houthi militants in Yemen have disrupted international commerce on the shortest shipping route between Europe and Asia. The attacks have pushed several shipping companies to reroute their vessels.
Meanwhile, drone attacks will likely lead to a reduction in Russia’s refining and export capacity and add uncertainty to the global oil market, mostly impacting oil product markets rather than crude, the bank said in a note.
The oil refinery in the Russian city of Yaroslavl is operating normally after an attempted drone attack on Monday, regional governor Mikhail Yevrayev said.
"At $82, we estimate Brent is trading today only about $4 above its fair-value, with $2 added to account for increased freight costs," J.P. Morgan added.
April Brent crude futures was up 0.3% at $82.10 and U.S. West Texas Intermediate crude gained 0.7% to $77.35 by 1449 GMT.