Oil price rises above $90 per barrel again

The oil price rally continued this week. According to international media, Tehran and Washington are seeking to resume peace negotiations, but there is still no sign of de-escalation. For the tenth consecutive day, the US has carried out strikes on Iran, while Tehran continues to target US interests in the region. Meanwhile, the Iran-backed Houthi rebels in Yemen have announced a naval blockade of the Bab el-Mandeb Strait, threatening an alternative export route used by Saudi Arabia to bypass the Strait of Hormuz.At the time of writing (Tuesday afternoon, 21 July), Brent crude is trading at $90.71 per barrel. That is 27% higher than on 1 July. Over the past week alone, the oil price has risen by more than 18%.After an interim agreement on a ceasefire and the reopening of the Strait of Hormuz was reached in mid-June, the oil price fell. On 1 July, Brent crude dropped to $71.57 per barrel, its lowest level in more than four months. During the following week it became clear that the ceasefire was no longer being observed by either side. This has gone hand in hand with further restrictions on shipping through the Strait of Hormuz.Before the war in Iran, an average of 138 vessels per day passed through the Strait of Hormuz, according to the Joint Maritime Information Center. By mid-June, during the ceasefire, that figure had fallen to an average of 36 vessels per day. Belgian newspaper De Morgen, citing data from AXSMarine, reports that just seven vessels passed through the Strait of Hormuz on both Friday and Sunday. On Saturday, the data showed thirteen vessels transiting the waterway.In a statement issued today, International Energy Agency (IEA) Executive Director Fatih Birol said that exports from the Gulf region remain lower than at the end of June, but are still significantly higher than between early March and mid-June. However, concerns over security of supply are increasing because of the hostilities around the Strait of Hormuz, energy infrastructure in the region and threats to the Bab el-Mandeb Strait. The latter has become increasingly important as an alternative route to the Strait of Hormuz, Birol said.Oil producers, particularly in the United States, Brazil, Venezuela and Kazakhstan, have also increased exports. Meanwhile, China has almost halved its crude oil imports. In addition, oil continues to be released from emergency reserves. Of the 400 million barrels made available by IEA member countries, around 110 million barrels remain. Governments also still hold strategic reserves of more than 1 billion barrels.DieselThe LTO members' price for 100 litres of diesel (from 4,000 litres) stands at €176.02. That is 2% higher than a week ago. Compared with the recent low on 18 June, the price has increased by almost 19%.Higher refinery marginsNot only have crude oil prices risen sharply, Dutch refineries have also earned more on refined products such as diesel, petrol and kerosene since the war in Iran began, according to the latest Energy Monitor published by the Authority for Consumers & Markets (ACM). The ACM also notes that wholesale prices for diesel and petrol had already started to rise before the recent closure of the Strait of Hormuz and the subsequent increase in crude oil prices.GasThe gas price continues to climb steeply, rising by more than 13% over the past week. It now stands at €60 per megawatt-hour, more than 48% above the most recent low of €40.50 per MWh recorded on 25 June.According to the IEA, increased LNG imports from other markets, particularly the United States and Canada, have offset around 70% of the loss of supply through the Strait of Hormuz. Because the resumption of exports from the Gulf region is taking longer than expected, the agency says this will be felt by all LNG importers, including Europe, which is seeking to replenish its gas storage ahead of the coming winter.According to Gas Infrastructure Europe, European gas storage facilities are currently 54% full, compared with 65% at the same time last year.ElectricityAverage day-ahead prices on the Epex Spot market ranged between €150.85 per megawatt-hour on 16 July and €69.64 per megawatt-hour on 19 July.