Peace or Conflict? Oil Awaits Hormuz Developments
Oil prices held steady as tensions in the Middle East flared up again, while markets kept a close watch on developments regarding an agreement between Iran and Oman to reopen the Strait of Hormuz. Brent crude closed at approximately US$83.55 per barrel, while WTI stood at US$78.18.
Oil market sentiment remains highly sensitive to news concerning Hormuz. Hopes that the waterway might reopen—potentially restoring millions of barrels of supply to the market—are tempered by the fact that vessel traffic remains far below normal levels. Only 33 ships were recorded passing through between Monday and Thursday, compared to the 130–140 ships per week seen prior to the conflict.
Prices briefly softened following reports that the US naval blockade of Iran could be lifted if an agreement is reached and commercial shipping resumes without hindrance. Such a scenario could boost oil supplies and exert downward pressure on prices.
However, security risks remain elevated. ADNOC reported attacks on three of its vessels over the past week, while Iran is considering banning US and Israeli ships and imposing transit fees on vessels passing through Hormuz—plans that face opposition from Washington and the shipping industry.
Regional tensions have also failed to subside, as the Houthi group launched fresh attacks against Saudi-backed forces. This situation has made market participants reluctant to aggressively unwind oil positions, even as the possibility of a Hormuz agreement remains on the table.
Newsmaker Analysis: Oil is currently caught between two major forces: the hope for a normalization of the Hormuz situation, which could drive prices down, and the risk of conflict, which keeps the geopolitical premium high. Until a final agreement is reached, Brent is likely to hold above the US$80 mark. An official deal could trigger a rapid price drop, whereas new attacks could push oil prices back up. (arl)
Source: Newsmaker.id
