Oil Surges, Hormuz Back in Focus
World oil prices rose sharply on Friday (May 15) after United States President Donald Trump renewed pressure on Iran and expressed his growing reliance on Tehran. Brent crude rose 3.3% to US$109.19 per barrel, while West Texas Intermediate (WTI) strengthened 3.7% to US$104.89 per barrel. This increase boosted Brent crude's weekly gain by 7.8%, while WTI surged 9.9%.
Market sentiment remains predominant on the uncertainty surrounding US-Iran peace talks and shipping disruptions around the Strait of Hormuz. After meeting with Chinese President Xi Jinping, Trump stated that both countries agree that Iran must not possess nuclear weapons and that the Strait of Hormuz must be reopened. This statement reinforced market concerns that the risk of military escalation has not fully subsided.
Analysts believe the oil market is currently driven more by geopolitical factors than by normal supply fundamentals. Vandana Hari of Vanda Insights believes the market focus has returned to the deadlock in negotiations and the blockade of the Strait of Hormuz, with the subsequent risk of a potential military escalation. Although Iran stated that 30 ships had passed through the Strait of Hormuz between Wednesday night and Thursday, this number remains far below the pre-war normal of around 140 ships per day.
In his opinion, the current oil price increase indicates that the market remains highly sensitive to developments in the Middle East. As long as the Strait of Hormuz remains unaffected and peace talks fail to produce a concrete agreement, oil prices have the potential to remain high.
This impact will not only be felt in the energy market but could also suppress global inflation, increase energy import costs, and make central banks more cautious in setting interest rates.
Source: newsmaker.id
