Oil Prices Rise, But Hormuz Blockage Remains Stalled
Oil prices rose as efforts to resume negotiations to end the Iran war stalled again, rendering the Strait of Hormuz nearly impassable and prolonging the supply disruption that has fueled global market volatility.
Brent futures rose 1.7% to trade above US$107 per barrel, after rising as much as 3%. This increase reflects a supply risk premium as shipping flows are said to have fallen sharply, with daily transits through Hormuz approaching zero.
Axios reported that Tehran submitted a new proposal to the US through Pakistani mediators to reopen the strait, with nuclear talks postponed to a later stage. However, President Donald Trump canceled a planned trip by his top envoy to Pakistan, while Iran stated it would not negotiate under threat; Trump is said to be holding a meeting on Monday with his national security and foreign policy teams.
While the ceasefire has largely held since early April, the shipping blockade by the US and Iran has prolonged disruptions to the flow of crude oil, petroleum products, natural gas, and fertilizer. The impact has also raised market concerns about the risk of inflationary pressures, amid reports of a shortage of liquefied petroleum gas in India.
The International Energy Agency assesses that this conflict has triggered the largest supply shock in history. Market participants believe that the longer Hormuz remains closed, the greater the need for consumption adjustments to offset a supply decline of at least 10%, with a cumulative loss of 1 billion barrels considered almost certain. The market is now monitoring developments regarding shipping access to Hormuz, signals from the mediation channel, the outcome of Monday's US national security meeting, and physical indicators such as transit rates and product availability. (gn)*
Source: Newsmaker.id
