- Oil prices are trading lower amid easing geopolitical tensions
- WTI fell by nearly $1.5/Bbl this morning to trade near $84/Bbl
- On Wednesday, NATO said that the missile that struck a Polish village was not, in fact, an intended Russian attack but rather a stray fired by Ukraine to defend their territory
- Immediate escalation in the Russia-Ukraine conflict might have tentatively eased, but the geopolitical risk persists as the market closely monitors the situation
- Flows on the Druzhba oil pipeline also resumed on Wednesday following a power supply disruption
- Demand concerns come into focus again as geopolitical tensions ease (BBG)
- China reported over 23,000 new Covid cases on Wednesday, the highest since April
- Guangzhou, the country's major manufacturing hub, extended lockdowns after a record number of new cases
- Despite the nation announcing changes to its zero-Covid policy last week, state media and officials have said that the changes were a refinement of rules and not a relaxation of controls
- U.S. says that the attack on an oil tanker on the Omani coast Tuesday night was most likely carried out by an Iranian drone (BBG, WSJ)
- According to National Security Advisor Jake Sullivan, " there is no justification for this attack, which is the latest in a pattern of such actions and broader destabilizing activities"
- He added that Iran is using drones more frequently " directly and via its proxies through the Middle East and proliferating to Russia for use in Ukraine"
- Additionally, three Israeli officials said that they believe that Iran was likely responsible for the strike
- Saudi Arabia and the U.S. shared intelligence earlier this month that suggested Iran was prepared to attack Saudi’s economic targets, but officials said the immediate threat subsided
- However, any attack on Saudi’s oil fields would result in a loss of output from one of the world’s largest oil producers