- Oil trades modestly lower amid signs of easing geopolitical risk premium
- June ’24 WTI lost 38c this morning to trade around $82.98/Bbl
- Equities rallied yesterday after the S&P Global PMI report indicated that U.S. business activity grew at its slowest pace this year
- This report was seen as bullish for markets, as market participants interpret the weakening economic data as a potential precursor to lower interest rates by the Fed
- Meanwhile, WTI's second-month options skew returned to its usual put skew as traders potentially discount the risk of further escalations in the Middle East, opting to protect against price drops
- Senate sends aid package with Iran oil sanctions to Biden (Bloomberg)
- The Senate approved a foreign aid package, including sanctions on Iran's oil sector, set to be signed into law by President Joe Biden. The legislation targets foreign ports, vessels, and refineries that process or ship Iranian crude
- The bill broadens secondary sanctions to cover transactions between Chinese financial institutions and sanctioned Iranian banks involved in purchasing petroleum and oil-derived products
- Around 80% of Iran’s 1.5 MMBbl/d oil exports are handled by small, independent Chinese refineries known as "teapots"
- Despite the expanded sanctions, many analysts expect a muted impact on Iran's oil exports, as President Biden may use waivers to limit the potential rise in oil prices
