Oil Rises for a Fifth Day, Hormuz Premium Thickens
Oil prices continued their rise for a fifth day, marking the longest winning streak since January, amid uncertainty surrounding US-Iran negotiations, which are seen as risking delaying the restoration of supply flows from the Persian Gulf. The geopolitical premium strengthened again as the market assessed that the negotiations had not shown clear progress.
Brent crude rose above $100 per barrel and was headed for a weekly gain of around 17%, while WTI traded near $100 per barrel. Two US officials familiar with the mediation process said Trump's posts on Truth Social and the decision to maintain a blockade of Iranian ports were complicating negotiations through mediators, including Pakistan.
The war that began in late February continues to roil energy markets, particularly as the near-closure of the Strait of Hormuz triggered a sharp decline in flows from major oil and gas producers in the Persian Gulf. Renewed concerns that peace talks have stalled, coupled with escalating rhetoric and military threats, have pushed the market to add a risk premium to oil prices.
Mona Yacoubian of CSIS believes the longer the conflict drags on, the more likely its impact will be felt for months, if not longer, as markets eventually adjust “paper” prices to the reality of shrinking physical supplies. This narrative reinforces the view that volatility and geopolitical premiums could persist despite rapidly changing headlines.
Futures rose after Trump said he ordered the US Navy to take action against ships laying mines in the strait. At the same time, US forces boarded a supertanker carrying Iranian oil in the Indian Ocean, as the blockade on shipping linked to the Islamic Republic tightened.
Shipping flows through Hormuz are said to remain extremely limited, with only occasional movements of Iran-linked vessels. Efforts to revive talks also remain deadlocked on other issues, including Iran’s nuclear program and Israel’s attack on Lebanon, while Trump announced a three-week extension of the ceasefire in Lebanon. In recent trading, June Brent rose 1.1% to $106.20 per barrel (8:18 a.m. Singapore time) and June WTI rose 0.96% to $96.77.
5 headline points:
- Oil rose for a fifth day, the longest streak since January, as US-Iran talks remain deadlocked.
- Brent broke through $106 and is headed for a weekly gain of approximately 17%; WTI held around $97.
- Supply disruptions as the Hormuz Strait remains frozen, reinforcing a geopolitical premium on prices.
- The US stepped up enforcement of the blockade, including the boarding of supertankers; Trump also issued strict orders regarding mines in the strait.
- The deadlock on core issues (Iran's nuclear issue, Lebanon conflict) adds uncertainty and maintains energy market volatility. (Asd)*
Source: Newsmaker.id
