Up until this week, Brent had been on a downward trajectory As we move into the last week of June, Iranian oil exports remain at historic lows RIYADH: It has taken a while but the oil market has finally responded to tensions in the Arabian Gulf. Brent crude and WTI prices rose to $65.20 and $57.43 per barrel respectively as oil traders were distracted from worries over supply to concerns about security. Up until this week, Brent had been on a downward trajectory with the price unable to break out of the low $60’s since the end of May as the market focused on weaker demand projections, in part linked to escalating trade tensions and the fallout from the US-China trade war. With the market now focused not only on the threat of military escalation in the Strait of Hormuz but also falling US crude oil and gasoline stockpiles, the bulls are once again on the rampage. As we move into the last week of June, Iranian oil exports remain at historic lows as Tehran is shunned by global refiners. We are also seeing the resumption of stronger buying appetite as Asian refiners try to secure oil cargoes before the end of the month, after having waited so long to do so in the hope that prices would keep falling after persistent oil short-selling surges amid concerns of slowing oil demand. Part of the downward movement in oil prices last month was attribute to weak refining margins for Naphtha. However, if oil prices continue to rise, this might end the weakest Naphtha refining margins in years. Naphtha margins have been negative since early 2018 with Asia awash with light distillate amid plentiful supplies. The ample supplies of light sweet crude which comes mainly from US shale also contributed to this bearishness as Asian refiners can’t absorb as much of this type of oil as the sour medium to heavy grades from the Arabian Gulf. The light sweet crude grades are a shorthand for oil that has less than 0.5 percent sulfur content. These light sweet crude grades yield more naphtha and gasoline than medium and heavy sour alternatives.