Oil prices stabilize as US-Iranian tensions escalate
Oil prices stabilized during trading on Thursday, as markets assessed the repercussions of the new US military strikes on Iran, which may hamper efforts to end The warbetween the two countries, delaying the full resumption of shipping traffic through the Strait of Hormuz, one of the most important energy corridors in the world.
And crude futures rose Brent rose by 6 cents, or 0.1%, to record $78.08 per barrel by 07:10 GMT, while US West Texas Intermediate crude futures rose by 13 cents, or 0.2%, to $73.65 per barrel.
Oil prices
The two standard crude oils recorded gains exceeding one dollar in subsequent trading to close the session Wednesday, after the US Army began carrying out a new wave of military strikes against targets inside Iran.
This came after the two benchmarks ended Wednesday’s session at their highest levels in more than two weeks, following US President Donald Trump’s threat to launch new attacks on Iran.
Before the recent escalation, prices were Oilis heading lower as markets absorb the return of oil supplies from the Middle East following the temporary truce, along with indications of rising oil inventories.
Linh Tran, a market analyst at the XS platform, said that West Texas Intermediate crude is likely to continue sharp fluctuations in the short term, noting that the continuation or escalation of tensions between the United States and Iran may push prices to rise to the level of $80 a barrel, according to Reuters.
She added that The decline in geopolitical risks in the Middle East will return the markets’ focus to the fundamental factors, most notably the rise in US inventories, the increase in domestic production, and the plans of major producers to increase supplies.
Data from the US Energy Information Administration showed a rise in crude oil stocks in the United States last week for the first time since mid-April, in light of a decline in exports.
In the latest developments in the conflict, the US military announced the completion of strikes targeting sites inside Iran with the aim of ensuring the continued smooth flow of navigation through the Strait of Hormuz, hours after the announcement. The American President ended the temporary agreement that aimed to end the war.
The US Central Command explained that the strikes targeted about 90 military targets inside Iran, which included air defense systems, coastal surveillance facilities, missile and drone depots, naval capabilities, and military logistical infrastructure along the Iranian coast.
On the other hand, Iran announced on Wednesday that it had targeted US military sites in Bahrain and Kuwait, in response to previous US strikes that targeted Facilities and infrastructure within its territory.
About a fifth of the global supplies of oil and liquefied natural gas pass through the Strait of Hormuz, and the Strait has represented one of the most prominent pressure cards that Tehran has possessed since the outbreak of war following the American and Israeli air strikes on Iran on February 28.
For his part, Suvroo Sarkar, head of energy research at DBS Bank, said that geopolitical risks are still high despite the temporary agreement between Washington and Tehran, It is expected that the state of uncertainty will continue to support oil prices in the near future.
He added that Iran has strong motives to prolong the negotiations, which means that the geopolitical risk premium added to oil prices may continue for several months, which will keep prices vulnerable to fluctuations, despite their tendency to gradually decline in the medium term.
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