Oil Remains Volatile, Trump's Ultimatum to Iran Key to Hormuz's Path
Oil prices were volatile on Monday as the market assessed US President Donald Trump's ultimatum urging Iran to reopen the Strait of Hormuz. WTI traded around US$98 per barrel after briefly reaching US$101.50 earlier in the session, indicating that the risk premium remains volatile following geopolitical headlines.
Brent also fluctuated within the upper range. The Brent contract hovered around US$112 per barrel after briefly rising to US$115, confirming that market participants' focus remains on the Hormuz shipping lane and the potential for ongoing supply disruptions.
Trump warned that he would "destroy" Iran's main power plant if the lane was not reopened to shipping by Monday evening. Tehran responded by declaring it would target US and Israeli assets in the region—including energy infrastructure, information technology, and desalination plants—if Iranian energy facilities were attacked, increasing the risk of a cross-sector escalation.
Since the Iran war began, oil prices have surged by about 50% as the conflict shows no signs of abating. The effective closure of Hormuz has hampered supply flows, while Middle East oil production has fallen sharply, leading the market to consider supply disruptions as the short-term baseline scenario.
The International Energy Agency (IEA) has warned that the global oil market is facing the biggest shock in history, despite the large-scale release of emergency reserves. US efforts to facilitate the sale of Russian and Iranian oil are also considered insufficient to neutralize risks when the primary concerns are security and access to shipping lanes.
Going forward, price direction will be largely determined by two factors: whether there is concrete evidence of the reopening of Hormuz and the normalization of tanker flows, and whether the escalation of attacks extends to the region's energy infrastructure. As long as this uncertainty persists, daily volatility is expected to remain high.
Source: Newsmaker.id
