Oil prices steady following death of Iranian president

West Asia News Agency via Reuters

• Ebrahim Raisi dies in helicopter crash
• Foreign minister also killed
• Presidential election within 50 days

Oil prices remained steady on Monday morning following the death of Iranian president Ebrahim Raisi, who was killed over the weekend in a helicopter crash in mountains near Iran’s border with Azerbaijan.

Brent crude rose less than 1 percent percent at $84.37 a barrel – slightly below the estimated breakeven price at which Saudi Arabia, the world’s swing producer, can balance its books.

The 63-year-old president and the foreign minister Hossein Amirabdollahian were traveling in the helicopter with an accompanying delegation. Reports say there were no survivors.

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The helicopter reportedly crashed on Sunday while returning from the Khoda Afraid region to Tabriz in the north of Iran.

The wreckage was discovered in the early hours of Monday morning after an overnight search and rescue operation in blizzard conditions.

Sheikh Mohammed bin Zayed Al Nahyan, the UAE president, offered “sincere condolences and deep sympathy to the Islamic Republic of Iran”.

Raisi, who was elected president in 2021, had been at the border with Azerbaijan on Sunday to launch the Qiz-Qalasi Dam, a joint project between the two countries.

Reuters/Mohamed Azakir

Mohammad Mokhber, a vice-president, will take over as acting president. He will form part of a group, including the parliament speaker and the head of the judiciary, who must arrange an election for a new president within 50 days.

Raisi was viewed as one of two candidates to replace Ali Khamenei, Iran’s ailing supreme leader, along with Khamenei’s son Mujtaba. 

Iran is a medium-sized oil exporter and is not subject to Opec+ quotas.

Despite US-led sanctions, the Islamic Republic increased oil production by 50,000 barrels per day (bpd) in April to 3.3 million bpd, according to the International Energy Agency.

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Exports, mainly to China, also rose to around 1.6 million bpd compared with last year’s average of 1.3 million bpd.   

The news came as it was announced that King Salman, the ruler of Saudi Arabia, has been diagnosed with a lung infection and will undergo treatment in the west coast city of Jeddah, the Saudi official press agency reported on Sunday.

Matt Stanley, energy expert at data and analytics company Kpler, told AGBI the marginal gains in oil prices are unlikely to be as a result of the death of Raisi or the health of the Saudi king. 

“Oil has been trading in a range more or less all year and the start to this week is following a similar pattern based on the push me/pull me market dynamic culminating in the over-asked question of what Opec will do if oil demand comes in lower than forecast. Essentially though, oil is in a fairly balanced position,” he said.