Oil Prices Rise as Iran Reviews US Proposal to End War
Oil prices surged on Thursday amid conflicting signals regarding the potential for de-escalation in the Middle East, while Iran is reportedly reviewing a proposal from the United States to end the war.
In morning trading, the global benchmark Brent crude for May delivery rose 4.0% to US$106.34 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude also rose 3.7% to US$93.66 per barrel.
The market is currently monitoring uncertain diplomatic signals from Tehran. Officials are said to be evaluating a US-backed proposal to end hostilities. However, Iran has publicly denied any direct negotiations with Washington and asserted that major differences remain unresolved. This uncertainty has kept market participants on edge.
Oil prices have been highly volatile in recent weeks as the conflict has disrupted energy flows from the Persian Gulf region, a crucial area for global oil supplies. Brent crude even soared to near US$120 per barrel earlier this month due to concerns about potential supply disruptions.
The Strait of Hormuz, a vital transit route for approximately one-fifth of global oil shipments, is also said to be effectively closed to tanker traffic due to threats of Iranian attacks on passing vessels. This situation is a major factor supporting oil prices at high levels.
On Wednesday, oil prices fell after reports emerged of potential negotiations between the US and Iran to end the conflict, which has now lasted almost a month. However, the market wavered again after mixed signals from Washington. Several US officials warned of tougher action if Iran did not demonstrate a constructive attitude, while President Donald Trump reportedly wants to see the war end soon.
Of major concern, oil prices remain well above pre-conflict levels in late February. This situation has raised concerns about a surge in global inflationary pressures, which could potentially prompt central banks to reconsider raising interest rates.
Analysts believe that if the energy supply disruptions persist for a longer period, the impact on global economic activity could be much greater, similar to the pressures that occurred after Russia's invasion of Ukraine in 2022. This situation also risks triggering a broader monetary tightening cycle in various countries.
Source: newsmaker.id
