Oil Rises as Markets Doubt Iran War Ceasefire Prospects
Oil prices rose on Friday, posting weekly gains, reflecting market skepticism about the prospects for a ceasefire in the nearly one-month-old Iran war. Brent rose $4.56, or 4.2%, to $112.57/barrel, while WTI gained $5.16, or 5.5%, to close at $99.64/barrel.
Since February 27—the day before the US and Israel launched attacks on Iran—Brent has surged about 53%, while WTI has gained about 45%. On a weekly basis, Brent has gained about 0.3%, while WTI has gained more than 1%, confirming that risk premiums remain “attached” to prices.
The market also appeared cautious in responding to US President Donald Trump's remarks regarding the Iran talks. An Iranian official told Reuters that the US proposals conveyed to Tehran via Pakistan were “one-sided and unfair,” raising questions about the direction and quality of the negotiations.
According to StoneX analyst Alex Hodes, investors are now more focused on the duration of the conflict than daily headlines. He believes a prolonged closure of the Strait of Hormuz or damage to infrastructure will maintain a large risk premium in oil prices.
On the other hand, even though Trump extended the deadline for Iran to reopen the Strait of Hormuz or face the threat of destruction of its energy infrastructure, the US has also sent thousands of troops to the Middle East. Trump is even said to be considering using ground forces to seize Kharg Island, Iran's strategic oil export hub—a scenario that could escalate the conflict.
Oil trading adviser Ritterbusch & Associates believes the market has the potential to become increasingly "immune" to Trump's conciliatory and optimistic comments, especially if there is evidence of an intention to send large additional troops to the region. Under these conditions, oil prices are considered vulnerable to wild fluctuations, with their direction largely determined by the risk of escalation and the condition of the Strait of Hormuz.
Source: Newsmaker.id
