Energy stocks advance as oil prices reach wartime high
Make us a preferred source
Make us a preferred source on Google
The news: The energy sector was the top performing sector across the ASX 200 after Brent crude surged to a wartime high on Thursday, following reports by Axios that Trump would not lift the naval blockade of Iranian ports anytime soon.
Shares in Santos (+2.64%), Yancoal (+1.13%), Whitehaven Coal (+2.25%) and Viva Energy (+2.72%) lifted the sector higher as of 2:36pm AEST.
The context: Brent crude surged above USD124 a barrel ($173) on Thursday, its highest intraday level since June 2022, according to Bloomberg. West Texas Intermediate also climbed near USD109 a barrel.
The surged comes after Axios reported that Trump is set to receive a briefing on new military actions in Iran, signalling a potential escalation in the Middle East.
The US military has requested the deployment of hypersonic missiles to the region, marking the first time the country has deployed those weapons. This follows earlier reports that Trump had refused to lift the naval blockade on Iranian ports until a new nuclear deal is secured.
In response, Iranian military adviser Mohsen Rezaee warned on state TV that Iran will retaliate if the blockade continues.
The International Energy Agency has described the conflict as the “biggest supply shock in history”, while Vitol Group warns the market faces a supply loss of approximately one billion barrels.
What they said: “Trump has ripped away the security blanket the market was clinging to- the hope that the war was about to end,” Westpac head of commodity research Robert Rennie said.
“Traders are now being forced to confront a much uglier reality: both sides still think they are winning, neither side has a clear incentive to negotiate, and energy prices are starting to accelerate higher,” he added.
