• 5 minutes China Faces Economic Collapse
  • 8 minutes ZeroHedge: Oil And Gas Bankruptcies To Accelerate As $137 Billion Debt Matures Over Next Two Years
  • 11 minutes Trump Will Win In 2020
  • 14 minutes Oil Production Growth In U.S. Grinds To A Halt
  • 6 hours The Belt & Road Initiative: A Wolf in Sheep's Clothing?
  • 5 hours Democrats and Gun Views
  • 6 hours How OPEC and OECD play their role in setting oil price in light of Iranian oil sanction ?? Does the world agree with Iran's oil sanctions ???
  • 8 mins Drone attacks cause fire at two Saudi Aramco facilities, blaze now under control
  • 8 hours Buy Oil Monday?
  • 2 hours Swedish Behavioral Scientist Suggests Eating Humans to ‘Save the Planet’ from Climate Change. What could possibly go wrong?
  • 22 mins Cost of oil
  • 4 hours “Who’s going to bail out the Central Banks?”
  • 3 hours Trump Orders Biofuel Boost
  • 12 hours It's the demand, Stupid
  • 9 hours Long Range Attack On Saudi Oil Field Ends War On Yemen
  • 6 hours Green New Deal Preview in Texas Town
  • 6 hours Used Thin Film Solar Panels at 15 Cents per Watt
Alt Text

A Fracking Ban Will Never Happen

Democratic candidates are ramping up…

Alt Text

Oil Demand Growth Weakest In Nearly A Decade

Global oil demand continues to…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Morgan Stanley: Why Tanker Wars Aren’t Causing An Oil Price Spike

The oil market has changed so much over the past five years that fast-growing non-OPEC oil production limits oil price gains from a spike in tensions in the Middle East, where Iran seized a British oil tanker last week, Morgan Stanley says.

“There is a difference in the oil market this time around because non-OPEC is simply growing so fast. That is the real game changer and that’s why the price action is relatively benign,” Morgan Stanley’s global oil strategist Martijn Rats told CNBC on Monday, commenting on the muted price reaction to Iran seizing a British tanker in Middle Eastern waters on Friday.

If such an incident in the most important oil shipping lane in the world, the Strait of Hormuz, happened just five years ago, oil prices wouldn’t have risen just 1-2 percent, the spike would have been “much, much more significant,” Rats told CNBC.

Oil prices were up early on Monday at 08:00 a.m. EDT, with WTI Crude rising 1.11 percent at $56.38 and Brent Crude up 1.25 percent at $63.25. Prices had eased back somewhat by 10:00am.

We are in a fundamentally well-supplied oil market, Morgan Stanley’s Rats said, adding that with non-OPEC oil production growing very fast and oil demand somewhat soft, it’s actually “quite remarkable that we’re only at $63 a barrel, despite these concerns.”

At the beginning of this month, just after OPEC and its allies rolled over their production cuts into 2020, Morgan Stanley revised down its long-term Brent Crude forecast to $60 from $65 a barrel. Over the next three quarters, the bank sees Brent at around $65 per barrel, a downward revision from a previous forecast of $67.50 a barrel.

On Friday, before news broke that Iran had seized a tanker, Fatih Birol, the executive director of the International Energy Agency (IEA), said that slowing oil demand growth and a persistent global glut would cap oil prices and keep them from rising too much, barring serious escalations in geopolitical tensions.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play