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The global energy market remains volatile due to ongoing political and military uncertainty in West Asia (Middle East). There is an atmosphere of fear in oil markets around the world due to doubt over the future of peace talks with Iran. Investors are worried that if the talks do not reach any conclusion, the supply of crude oil from the region could be affected for a long time. For this reason, after registering the biggest increase in a month, crude oil prices have currently stabilized within a limited range.
Market recovered after Monday’s huge rise
Global benchmark Brent Crude is currently trading around $95 per barrel, compared to a huge rise of 4.2% in the last trading session. On the other hand, the price of US benchmark West Texas Intermediate (WTI) crude remains slightly below $92 per barrel.
In fact, there was panic in the market on Monday when a report claimed that Tehran (Iran) is interrupting the ongoing peace talks with America in protest against the attacks being carried out by Israel in Lebanon. As soon as this news came, the prices of crude oil were on fire. However, later a statement by US President Donald Trump calmed the market a bit, due to which prices fell marginally and the market stabilized.
Latest crude oil prices and market situation
You can easily understand the current prices of crude oil and its movement in the international market from the table given below:
Deal on Strait of Hormuz may be reached next week
US President Donald Trump has given positive indications on this entire matter. In a telephone conversation with ABC News, Trump claimed that a memorandum of understanding (MoU) with Iran to fully reopen the strategically important sea route ‘Strait of Hormuz’ could be ready by next week.
Donald Trump’s big statement
The US President clarified that although the talks are moving in the right direction, Washington still has to “achieve some more important points” with Iran before finalizing this historic deal, so that the agreement can be fully strengthened and secured.
Concern increased due to Iran’s new threat: Bab al-Mandeb also on target?
On one hand, America is expressing hope for an agreement, while on the other hand, a report by Iran’s semi-official news agency ‘Tasnim’ has given sleepless nights to the oil importing countries. According to this report, the agenda of Tehran and its regional allies not only includes closing the Strait of Hormuz, but also the closure of the Strait of Hormuz, located at the southern end of the Red Sea. Bab al-Mandab Strait Are also planning to block it completely.
Since Bab al-Mandeb is considered a vital and lifeline route for oil and gas exports across the world, the mere threat of its closure poses a threat of rising fuel prices in global markets.
Trump-Netanyahu conversation and Lebanon’s stance
The phone call between Donald Trump and Israeli Prime Minister Benjamin Netanyahu regarding the Lebanon war has also played a big role in increasing this market contortion, because different things have been said about this conversation from both sides.
Meanwhile, the Lebanese Presidential Office has shared a post on social media demanding that the US-mediated ceasefire between Israel and Iran-backed Hezbollah should be extended from Beirut to the entire Lebanese areas. More diplomatic talks in this regard are expected on Tuesday and Wednesday, which are being closely watched by the global oil market.
