Oil prices surged on Monday as Middle East countries cut production amid the ongoing conflict in the region, leading to reports that G7 countries, including the U.S., planned to discuss a coordinated release of crude from their strategic reserves.
West Texas Intermediatecrude futures were last up 12% to $102.28 per barrel, surpassing the $100 mark for the first time since mid-2022 — when Russia's invasion of Ukraine jolted global energy markets. WTI rose as high as $119 a barrel overnight. International benchmarkBrentcrude traded more than 12% higher to $104.76 per barrel.
The G7, or Group of Seven, finance ministers wereexpected to hold a callat 8:30 a.m. ET to discuss the idea and the impact of the war, the Financial Times reported, citing people familiar with the situation.
U.S. crude oilsurged about 35%last week in its biggest gain in futures trading history dating back to 1983.
Shortly after oil blasted past $100 at the open of trading Sunday evening, President Donald Trumppostedon Truth Social that a gain in "short term oil prices" was a "very small price to pay" for destroying Iran's nuclear threat.
"Only fools would think differently!" Trump added.
Kuwait, the fifth-biggest producer in OPEC, announcedprecautionary cutsSaturday to its oil production and refinery output due to "Iranian threats against safe passage of ships through the Strait of Hormuz." The state-owned Kuwait Petroleum Corporation did not detail the size of the cuts.
Output in Iraq, the second-biggest OPEC producer, has effectively collapsed. Production from its three main southern oilfields has fallen 70% to 1.3 million barrels per day, three industry officials toldReutersSunday. Those fields produced 4.3 million bpd before Iran war.
And the United Arab Emirates, the third-biggest producer in OPEC, said Saturday that it is "carefully managing offshore production levels to address storage requirements." The Abu Dhabi National Oil Company (ADNOC) said its onshore operations are continuing normally.
Gulf Arab states are cutting production because they are running out of storage space, as oil barrels pile up with nowhere to go due to the closure of the Strait. Tankers are unwilling transit the narrow waterway because they are worried Iran will attack them. About 20% of the world's oil consumption is exported through the Strait.
Source: Drudge Report
