Early Morning Kommentar

 -  Asia midday crude futures: Ice Brent steadies

15 April (Argus) — Ice Brent crude futures were largely steady in early Asian trading today, shrugging off the escalation of the conflict in the Middle East with Iran's strikes against Israel.

At 04:00 GMT the Ice front-month June Brent contract was at $90.27/bl, down by 18¢/bl from its settlement on 12 April when the contract ended 71¢/bl higher.

The Nymex front-month May crude contract was at $85.39/bl, lower by 27¢/bl from its settlement on 12 April when the contract ended 64¢/bl higher.

Oil prices had hit a more-than five month high of $92.18/bl on 12 April with rising Middle East tensions. But crude futures were largely unmoved in early trading on 15 April, as the market keeps a close watch for an indication of how Israel will respond to Iran's attacks. The country's war cabinet is meeting to discuss its next steps. Iran fired hundreds of drones and missiles against Israel on the evening of 13 April, ushering in a new phase in a six-month conflict that had centred on Gaza that is threatening regional escalation. Almost all were intercepted before they reached Israeli airspace, according to the Israel Defence Forces.

Iran, the US and regional powers appear to want to avoid any further increase in hostilities. Tehran's foreign minister Hossein Amir-Abdollahian said Iran considers its operation to have ended. The US is urging Israel to claim victory for its defence, in an apparent effort to discourage Israeli prime minister Benjamin Netanyahu's government from feeling compelled to retaliate.

Regional shipping also continues to face the risk of disruptions. Iranian naval vessels on 13 April seized the Portuguese flagged, British-owned MSC Aries container ship transiting through the Gulf of Oman.

Ukrainian drone strikes on Russia's refineries could affect global markets and Kyiv should pick alternative targets, according to US defence secretary Lloyd Austin. "Those attacks could have a knock-on effect" for global oil supply, Austin told the Senate Armed Services Committee on 9 April. His remarks are the first public confirmation of concerns that Washington has expressed to Kyiv about the strikes, which may have forced more than 800,000 b/d of Russian refining capacity off line. Ukrainian president Volodymyr Zelenskiy says Kyiv will end the attacks if Russia stops strikes on Ukraine's power grid.

Global refinery runs will average 1mn b/d above 2023 levels this year, the IEA forecast in its latest Oil Markets Report, marking a downwards revision of 160,000 b/d since its previous projection. The downgrade to 2024 growth mainly reflects the impact of drone attacks on Russian refineries in the first half of the year. "Unplanned outages in Europe and tepid Chinese runs also contribute to a slower rebound from the 1Q 24 low point for the year," the IEA said.