Brent Holds Steady as Market Weighs Hormuz Risks
Brent crude prices remained relatively stable around US$89 per barrel during Monday's trading (August 17), following strong gains last week. Price movements were volatile as the market weighed fresh tensions in the Middle East against indications that oil shipments through the Strait of Hormuz had not come to a complete halt.
Geopolitical sentiment heated up again after President Donald Trump threatened military action against Oman should the country obstruct a US blockade of Iranian vessels. Meanwhile, a 60-day truce between the US and Iran expired without significant progress, leaving negotiations between the two nations at an impasse.
Nevertheless, Middle Eastern producers have managed to continue shipping large volumes of crude oil out of the Persian Gulf. This has helped temper market fears regarding more severe supply disruptions and acted as a factor limiting Brent's rise.
Iran and Oman were also previously reported to be nearing an agreement on the management of the Strait of Hormuz. However, the United States is not involved in these talks and is expected to continue demanding unrestricted navigation through the waterway, a critical chokepoint for global oil and LNG flows.
Washington has also signaled plans to ramp up economic pressure on Iran. US Treasury Secretary Scott Bessent indicated that new restrictive measures could be announced this week. This shift in focus from military pressure to economic sanctions slightly reduces the risk of direct escalation but raises the possibility of prolonged disruptions in the Strait of Hormuz.
Newsmaker Analysis: Brent is currently caught in a tug-of-war between geopolitical risks and supply continuity. As long as oil flows from the Gulf continue, price increases are likely to remain limited. However, the US-Iran standoff, potential new sanctions, and threats to the Strait of Hormuz are sustaining the risk premium and keeping the potential for oil price volatility high. (gn)
Source: Newsmaker.id
