The Commodities Feed: Saudi supply uncertainty has oil extending gains
At a Glance
Per the full note from ING's commodities desk, oil remains firmly bid with ICE Brent settling above $105/bbl after an intraday spike to just under $110, supported by the shutdown of Saudi Arabia's 7m b/d East-West pipeline and persistent Middle East escalation. The desk argues the floor is unlikely to give way until markets get clarity on Saudi supply, with reports suggesting the pipeline could be offline for weeks. Trump's comments on a potential Iran deal and a Russia-Ukraine energy infrastructure truce have done little to relieve product markets, as the ICE gasoil crack sits near record highs above $80/bbl. With no internal FX coverage on the relevant pairs and no high-impact events on the near-term calendar, this is a pure commodity-driven macro signal for FX desks to digest via terms-of-trade and inflation channels.
Key Takeaways
- 01ICE Brent settled above $105/bbl after touching just below $110, with ING flagging $110 as a key resistance level tested three times.
- 02Saudi Arabia's 7m b/d East-West pipeline shutdown is the primary supply shock; reports suggest it could be offline for weeks.
- 03Middle distillate cracks remain near record highs, with the ICE gasoil crack above $80/bbl, indicating little relief from diplomatic headlines.
- 04The oil floor is likely to hold until clarity on Saudi supply emerges, keeping inflation and terms-of-trade risks elevated for FX markets.
Full Analysis
What the desk is arguing
Per the full note , ING's commodities team frames the oil market as firmly supported, with the floor unlikely to give way until there is clearer visibility on Saudi supply following the East-West pipeline shutdown. The desk emphasizes that despite President Trump's comments suggesting Iran is keen to make a deal and that Russia and Ukraine have agreed to stop hitting each other's energy infrastructure, the market has shown little relief.
The supporting evidence is stark: ICE Brent traded to an intraday high of just below $110/bbl, a level that has capped the market for three consecutive days, before settling over 1% higher at $105.68/bbl. The 7m b/d East-West pipeline outage is the key supply shock, with reports suggesting it could be offline for several weeks and Saudi port stocks at Yanbu only sufficient to sustain exports for several days. The risk that port stocks run out before the pipeline resumes is explicitly flagged, and efforts to redirect exports via the Strait of Hormuz are complicated by existing disruptions there.
The alternative read would be that diplomatic progress — Trump's openness to an Iran deal and the Russia-Ukraine energy truce — should compress risk premia. But the desk implicitly rejects this by noting that middle distillate cracks remain near record levels, with the ICE gasoil crack above $80/bbl, suggesting the physical market is not buying the de-escalation narrative.
How other firms see it
Given the absence of internal FX coverage on the relevant pairs, there are no aligned or contrary firm stances to group. The desk's commodity view intersects with FX through the terms-of-trade channel and inflation expectations, but no firm-level targets are available to cross-reference.
Traders should watch related indicators such as the ICE gasoil crack and Brent front-month futures for spillover into energy-importing currencies and central bank policy expectations. The oil supply shock also has implications for the US dollar via safe-haven flows and for commodity-linked currencies like the Norwegian krone and Canadian dollar.
What the calendar says
No high-impact events are scheduled in the next 30 days for the relevant jurisdictions, so there is no calendar catalyst to cross-reference. The desk's view remains driven by geopolitical supply developments rather than scheduled data releases.
Market Implications
Watch ICE Brent's ability to break and hold above the $110/bbl level that has capped gains for three days; a sustained break would reinforce the supply-driven bid and likely spill over into energy-importing currencies and inflation breakevens. The ICE gasoil crack above $80/bbl is the key product-market signal to monitor, as continued strength would suggest the physical market is ignoring diplomatic de-escalation and could force central banks to maintain a hawkish tilt.
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Articles The Commodities Feed: Saudi supply uncertainty has oil extending gains Published 02:34 Commodities daily Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Oil prices remain firmly supported, with that floor unlikely to give way until markets ge
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