Physical oil prices near $110 as Iran, Ukraine conflicts hit supply

Physical oil prices have surged, with some benchmarks approaching $110 per barrel, as ongoing conflicts in Iran and Ukraine continue to disrupt global supply. This increase highlights the strain on the physical crude market, particularly for grades such as dated Brent, which has seen significant pressure. The International Energy Agency has identified the Iran conflict as the largest supply disruption in the history of the global oil market, prompting the release of 400 million barrels from emergency reserves. Meanwhile, the Russia-Ukraine war has exacerbated the situation by tightening supplies of refined products like diesel and gasoline. Key Takeaways Rising physical oil prices appear consistent with scenarios where ongoing geopolitical tensions impact supply, suggesting heightened supply concerns. Market pricing suggests participants view the likelihood of crude oil reaching a new all-time high as increased, with current odds showing a rise in YES outcomes for end-of-year scenarios. The current geopolitical landscape, combined with already strained global oil supplies, could indicate further price pressures in the physical oil market. What to Watch Key figures such as OPEC Secr...