Oil Rises for Fourth Day, Hormuz Stalemate Boosts Risk Premium
Oil prices continued their rise for a fourth day after the US and Iran failed to hold a new round of peace talks and remained locked in a struggle for control of the Strait of Hormuz. Uncertainty over shipping access and supply flows from the Persian Gulf kept market sentiment tense.
Brent traded near $106 per barrel after surging nearly 13% in the past three sessions, while WTI hovered around $97. US President Donald Trump said the ceasefire agreed on April 7 would remain in effect indefinitely pending Iran's submission of a new peace proposal, but Tehran has stated it has no plans to enter negotiations anytime soon.
The war that began in late February continues to roil energy markets, particularly as the near-shutdown of Hormuz triggered a sharp drop in flows from key Persian Gulf producers. The US maintained a naval blockade on shipping entering and leaving Iranian ports to pressure Tehran, a move Iranian Foreign Minister Abbas Araghchi called a violation of the ceasefire.
Market participants believe the risk remains tilted to the upside as long as Hormuz flows remain unrecovered. Dennis Kissler of BOK Financial Securities said that as long as the US and Iran remain deadlocked, the "path of least resistance" for prices remains higher, and the longer oil is prevented from flowing through the strait, the more upward pressure is likely to persist.
On the ground, Iran is said to have closed the Hormuz Strait to almost all international traffic, and Iranian speedboats fired on commercial vessels in the strait on Wednesday. Since the US blockade was imposed earlier this month, US forces have also reportedly seized and boarded ships and turned back dozens of others, while the standoff between the two countries also encompasses other issues such as Iran's nuclear program and the Israeli conflict in Lebanon.
Beyond geopolitical factors, the market is also monitoring US oil inventory data from the EIA, which showed declines across all major refined product categories. The boost in global demand for US supplies is said to have pushed total oil and fuel exports to new records. In the latest trading, June Brent rose 1.7% to $103.62 per barrel (8:19 a.m. Singapore time) and June WTI rose 1.9% to $94.76.
5 key points (detailed & simple):
- Oil rose for a fourth day as US-Iran talks stalled and the Hormuz standoff continued.
- Brent briefly approached $106 after rising nearly 13% in three sessions; June Brent was last up 1.7% to $103.62 and June WTI was up 1.9% to $94.76.
- Trump extended the ceasefire indefinitely, but is awaiting a new proposal from Iran; Iran has stated it is not ready to enter negotiations immediately.
- Iran closed Hormuz to almost all traffic and there were reports of gunfire on commercial vessels; the US maintained the blockade and turned back dozens of vessels.
- EIA data showed a decline in refined product stocks and record US oil/fuel exports, underscoring the market's growing reliance on US supplies as Middle East disruptions continue. (Asd)
Source: Newsmaker.id
