By: Economy Middle east

Oil prices fluctuated between gains and losses on Monday as investors balanced increasing threats from the U.S. and Iran regarding energy facilities against the release of millions of barrels of seaborne Iranian oil following the temporary removal of sanctions by Washington. 

By 09:44 Dubai time, Brent crude futures increased 93 cents to $107.34 a barrel, whereas U.S. West Texas Intermediate declined 7 cents to $98.16 a barrel. Both contracts had decreased by more than $1 earlier in the session, and the spread of over $13 a barrel between Brent and WTI represents the widest gap in years. 

On Saturday, U.S. President Donald Trump threatened to “obliterate” the power plants of Iran if the Strait of Hormuz was not fully reopened within 48 hours, occurring just a day after he discussed “winding down” the war, which is now in its fourth week.

Global supply and strategic concerns

Fatih Birol, the executive director of the International Energy Agency, stated on Monday that the crisis in the Middle East is “very severe” and worse than the combined impact of the two oil shocks of the 1970s. The conflict has almost entirely stopped shipping through the Strait of Hormuz, a passage that handles approximately 20 percent of global oil and liquefied natural gas flows. Analysts have estimated a production loss of 7 million to 10 million barrels of oil per day within the Middle East.