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Oil prices ease on hopes of Middle East diplomacy as freight costs soar
Oil prices fell as traders hoped for diplomatic progress, though attacks on Gulf shipping have escalated in recent weeks. Asian LNG prices rose above $30 per MMBtu, the highest since December 2022, and record freight costs are pushing Asian buyers to use smaller tankers. HSBC's chief executive said alternative export routes could make the Strait of Hormuz redundant within five years.
Why it matters
Energy and shipping costs feed directly into inflation and fuel prices for consumers worldwide.
Background
Brent crude has risen sharply this autumn because of the conflict involving Iran and attacks on Gulf shipping. Asian refiners depend heavily on Middle Eastern crude.
The story so far
- Brent crude touches $110 as Hormuz attacks escalate
- Brent touches near $110 before easing as Middle East supply recovers
- Oil prices ease on hopes of Middle East diplomacy as freight costs soar
- IEA chief sees little chance of oil market normalizing next year
Sources
- CNBC ↗Oct 20, 3:40 PM ET
- OilPrice ↗Oct 20, 12:11 PM ET
- OilPrice ↗Oct 20, 9:30 AM ET
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