Oil prices rise following the death of Iran’s president and concerns over the health of the Saudi king
Oil prices extended gains on Monday amid political uncertainty in major producing countries after Iran’s president died in a helicopter crash and Saudi Arabia’s crown prince canceled a trip to Japan due to concerns over the king’s health.
Brent crude rose 41 cents, or 0.5%, to $84.39 a barrel , after earlier reaching $84.43, its highest since May 10.
U.S. West Texas Intermediate (WTI) crude for June increased by 23 cents to $80.29 a barrel, after hitting $80.35 earlier, the highest since May 1. The June contract expires on Tuesday, and the more-active July contract was at $79.89, up 31 cents, or 0.4%.
Iranian President Ebrahim Raisi, considered a potential successor to Supreme Leader Ayatollah Ali Khamenei, died in a helicopter crash in mountainous terrain near the Azerbaijan border, officials and state media reported on Monday.
Separately, Saudi Arabian Crown Prince Mohammed bin Salman postponed his visit to Japan, scheduled to begin on Monday, due to a health issue with his father, King Salman, according to Japan’s Chief Cabinet Secretary Yoshimasa Hayashi.
Saudi Arabia’s state news agency reported on Sunday that 88-year-old King Salman would undergo treatment for lung inflammation.
Brent ended the previous week up about 1%, marking its first weekly gain in three weeks, while WTI rose 2% on improved economic indicators from the U.S. and China, the world’s largest oil consumers.
Despite regional volatility, oil prices moved only slightly.
“The oil market remains largely rangebound and without any fresh catalyst we will likely have to wait for clarity around OPEC+ output policy to break out of this range,” said Warren Patterson, head of commodities strategy at ING.
The Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, are scheduled to meet on June 1.
“The market also appears increasingly numb to developments on the geopolitical front, likely due to the large amount of spare capacity OPEC is sitting on,” Patterson added.
Saul Kavonic, an energy analyst at MST Marquee, noted that the market and industry were already accustomed to Crown Prince Mohammed bin Salman’s leadership in the energy sector. “Continuity in Saudi strategy is expected regardless of this health issue,” he said.
In the United States, Washington capitalized on the recent drop in oil prices, announcing late last week that it had purchased 3.3 million barrels of oil at $79.38 a barrel to help refill its Strategic Petroleum Reserve after a massive sale from the stockpile in 2022.
