Iran's Unrest Pushes Oil to Highest Level in 2.5 Years

A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak
A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak
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Iran's Unrest Pushes Oil to Highest Level in 2.5 Years

A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak
A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak

The price of crude oil has hit its highest level in two and a half years following the unrest in Iran. Brent crude futures, the international benchmark, were at $67.07 a barrel, up 0.5 percent, after hitting a May 2015 high of $67.29 a barrel on Tuesday.

According to Reuters, Carsten Fritsch, an analyst at Commerzbank, warned that prices faced a correction as support lent by unrest in Iran will weaken unless the situation begins to affect oil production, which is not yet the case, or the United States re-imposes sanctions.

Commerzbank expected the crude oil price to reach $60 in 2018. Traders say that markets have risen recently, at a time when it is likely that the US production will increase again amidst doubts that the demand growth would continue at its current levels.

Potentially undermining the trend towards tighter market conditions is US oil production C-OUT-T-EIA, which has risen by almost 16 percent since mid-2016, hitting 9.75 million barrels per day (bpd) at the end of last year.

There have been some concerns that Russia might not abide fully by its pledges with OPEC to curb oil output up to 300,000 bpd from its highest monthly level in 30 years, reaching 11,247 million bpd in October 2016.

The latest data of 2017 showed that Russia oil output increased 10.98 million bpd as an average, compared to 10.96 million bpd in 2016, and 10.72 million bpd in 2015.



Boeing Shares Drop after Air India Crash

A tail of an Air India Boeing 787 Dreamliner plane that crashed is seen stuck on a building after the incident in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
A tail of an Air India Boeing 787 Dreamliner plane that crashed is seen stuck on a building after the incident in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
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Boeing Shares Drop after Air India Crash

A tail of an Air India Boeing 787 Dreamliner plane that crashed is seen stuck on a building after the incident in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
A tail of an Air India Boeing 787 Dreamliner plane that crashed is seen stuck on a building after the incident in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave

The crash of an Air India 787-8 Dreamliner jet minutes after taking off on Thursday poses another challenge for Boeing, whose new CEO has been trying to rebuild trust following a series of safety and production challenges.

It was not clear what caused the crash, as air disasters can occur for a number of different reasons. The London-bound plane crashed in India's western city of Ahmedabad, authorities said, in the world's worst aviation disaster in a decade.

The disaster, in which most of the 242 people on board were killed, muddies the efforts of CEO Kelly Ortberg to move past its recent issues after the planemaker hit production targets in May and received a vote of confidence from airline bosses in recent months. Shares were down about 4.9% on Thursday. Boeing said it was aware of the initial reports and was working to gather more information.

Before the crash, airline executives had been voicing greater confidence in Boeing's rebound in deliveries and in Ortberg's leadership after years of reputational damage for the planemaker.

At a recent summit in New Delhi, executives were more optimistic over Boeing's crises around safety and regulation. The widebody 787 planes, one of the most modern passenger aircraft in service, have never had a fatal crash until the Air India incident. They were grounded in 2013 due to battery issues, but no one was reported injured.

"It's a knee-jerk reaction (to the incident) and there's revised fears of the problems that plagued Boeing aircraft and Boeing itself in recent years," said Chris Beauchamp, analyst at IG Group.

Boeing's narrowbody 737 MAX jets were grounded for years following two fatal crashes and have faced years of scrutiny and production delays. Last year, the US planemaker came under renewed scrutiny after a door plug blew off a 737 MAX 9 mid-flight, prompting a temporary FAA grounding and fresh concerns over quality control.

Shares of Spirit AeroSystems, a key supplier, and GE Aerospace, which makes engines for the jet, also fell about 2% each. GE Aerospace said it has activated its emergency response team and would support the investigation, but did not specify if the Air India aircraft was equipped with its engines.

The engine maker did not immediately respond to a Reuters request for comment.

Boeing's outstanding debt also sold off modestly after the crash. Its bonds maturing in May 2029 were trading at 88 basis points over Treasuries, or 10 basis points wider than on Wednesday, according to a bond broker.