Oil Prices Rebound, Hormuz Remains Held
World oil prices rebounded after previously experiencing their biggest daily decline since April 2020. This increase occurred as the market continued to monitor the situation in the Strait of Hormuz, which remained largely blocked, while Israel's attack on Lebanon raised concerns that the Middle East ceasefire could collapse again. Brent crude moved closer to US$97 per barrel after a 13% plunge the previous day, while West Texas Intermediate (WTI) also held around the same level.
Market attention remains focused on the Strait of Hormuz, a strategic waterway that before the conflict escalated carried about a fifth of the world's crude oil and liquefied natural gas supplies. Iran's semi-official Fars news agency reported that tanker shipping was temporarily halted following the Israeli attack. However, this claim was denied by US Vice President JD Vance, who said there were signs the waterway would gradually reopen.
Amid this uncertainty, two fully loaded Chinese oil tankers were reported approaching the strait from the Persian Gulf. If successful, the ships could potentially become the first full tankers to pass through the waterway since the ceasefire was declared. However, market participants consider the chances of the voyage's success uncertain, as traffic in the region has yet to show any significant recovery.
The near-total disruption to traffic in the Strait of Hormuz has triggered one of the largest disruptions in modern oil market history. Not only has energy shipments been disrupted, but production at several oil and gas fields has also declined. Some refineries have even begun reducing processing capacity or temporarily halting operations. This situation suggests that even if the shipping lanes begin to reopen, the restoration of global energy supplies will not be instantaneous and will likely take weeks.
On the diplomatic front, the United States is seeking to open direct negotiations with Iran. JD Vance is scheduled to lead a US delegation to Islamabad for direct talks with Tehran on Saturday morning local time. However, the situation on the ground remains far from stable. Sporadic clashes continue, including Israeli military action in Lebanon and Iranian attacks on Gulf states, reinforcing the view that geopolitical risks remain high.
Differing views regarding the scope of the ceasefire also complicate the situation. Tehran and the US-Israeli side have yet to agree on whether Lebanon is included in the agreement. Iranian Parliament Speaker Mohammad-Bagher Ghalibaf even stated that three points of the ceasefire proposal have been violated. Meanwhile, Iran's Ports and Maritime Organization announced two safe passages for ships entering and exiting the Strait of Hormuz, which it said were designed to avoid potential mines in the area.
Overall, the rebound in oil prices reflects that the market does not yet see the crisis as completely over. As long as the Strait of Hormuz remains open and energy supplies remain normal, oil prices have the potential to remain high. Several analysts believe that the US$90 level remains a strong foothold for WTI in the short term, as the market remains overshadowed by the risk of supply disruptions, unresolved conflicts, and uncertainty about whether the ceasefire will truly hold. (asd)
Source: Newsmaker.id
