The price of oil shoots up again with the war in Iran at a dead end

BarcelonaThe exceptional visit of the President of the United States, Donald Trump, to China has ended without a clear path for the geopolitical tensions caused by his administration. The unfounded optimism of the New York executive has not served to calm the market: on the contrary, the end of the trip coincided, this Friday, with the most intense rise in the price of the Brent barrel of the entire week. The European reference for crude oil skyrocketed at half past five in the afternoon, approaching 109 dollars. It is already on its way to the highs since the beginning of the war, close to 115 dollars, set at the beginning of the month.

The oil sector has received without any euphoria the proposals of Trump for Beijing. The White House has sought for China to increase oil purchases from the US and reduce orders from Iran. It should be remembered that the Asian giant is the main customer of Iranian crude, with 80% of all exports ordered from Tehran.

Although the American administration would see this agreement as good news, American consumers might question it: in April, US oil companies broke their record for crude oil sales, with about five million barrels per day, and subsequently inflation soared to 3.8%.

"Difficult exit"

Market sources consulted by the newspaper ARA observe that, unlike the first weeks of the war, when crude suffered extreme volatility, the market seems to have stabilized. It has stabilized, however, at very high prices, more than 50% above where they were before the Israeli-American offensive on Iran. Sector sources consulted by this media outlet believe that "there is no easy solution" to the tension in the product because, beyond the conflict, "many refining infrastructures in the region have been damaged".

Furthermore, in opposition to the energy crisis that broke out after the Russian invasion of Ukraine, Gulf oil "has no alternatives" for distribution. "If it doesn't go through Hormuz, it doesn't leave there," considers the same voice from the oil world.

The stock market, depressed

As has been the trend in recent weeks, the stock market has plummeted as a consequence of bad oil news. The Ibex-35 closed Friday's session with a general decline of more than 1.2%, with particularly sharp drops in companies most dependent on the price of oil derivatives, such as large industry, with the collapse of ArcelorMittal, or the airline group IAG. On the contrary, Repsol was the best performing stock of a poor day, with a value increase of less than 1%.