Oil Rises Again, Market Doubts Rapid De-escalation
Oil prices rose again after the market responded to conflicting signals from the US and Iran regarding efforts to end the war that has left the Strait of Hormuz nearly closed. Brent rose above US$104/barrel after falling more than 2% on Wednesday, while WTI hovered around US$92. The White House insists peace talks are still ongoing, but Tehran has rejected the US approach and put forward its own conditions, including sovereign control over the strategic shipping lane.
The risk of new restrictions in Hormuz has added to the uncertainty. Iran's parliament is reportedly preparing a draft law to levy a fee in exchange for "security" for ships passing through, and it is scheduled to be finalized next week, according to Fars. Meanwhile, supply disruptions remain the main narrative: the near-total closure of Hormuz has eliminated millions of barrels of daily production and pushed product prices (diesel to aviation fuel) up faster than crude.
The market is also monitoring additional risks from other fronts, including reports of drones targeting Turkish tankers carrying Urals oil near Istanbul. BlackRock warned that investors may be underestimating the risks from Iran, and that oil prices could still surge to US$150/barrel even if the war ends soon, as supply chain normalization takes time.
In Washington, Trump reiterated that the US is talking to Tehran and hopes the conflict can be ended within weeks, but the White House also threatened further escalation. Spokeswoman Karoline Leavitt said Trump is "not bluffing" and is ready to increase pressure. Sparta Commodities believes the market is premature in pricing in de-escalation, given that Iran and Israel have not shown interest in a quick resolution and the continued increase in US troop deployments.
A source familiar with the situation said the Pentagon has ordered the deployment of two Marine Expeditionary Units (approximately 5,000 personnel plus aircraft and landing vehicles) to the region. The US is also said to be sending more than 1,000 personnel from the 82nd Airborne Division. This military influx reinforces the signal that security options remain in play alongside diplomacy, so oil volatility is expected to persist.
Source: Newsmaker.id
