Oil Holds Higher, Hormuz Cautions Market Caution
Oil prices are holding firm after a two-day rally, as the market reasserts risk premiums in the Middle East—particularly regarding Iran. In Asian trading, WTI held above $64 per barrel while Brent hovered around $69, following consecutive gains in the previous two sessions.
The main trigger came from the Strait of Hormuz. The US government issued guidelines for US-flagged vessels to maintain as much distance as possible from Iranian waters when passing through, even as there were signs of progress in the Washington-Tehran nuclear talks.
The Strait of Hormuz is the “lifeblood” of energy shipments from the Middle East—a route connecting producers to global markets, particularly Asia. Iran has repeatedly threatened to close the route when tensions escalate, and while this has never happened, the market usually reacts immediately upon repeated threats.
This week, traders will also be monitoring a series of reports that provide clues about the global supply-demand balance, starting with updated projections from US officials and a series of other energy reports. On the other hand, the large US military presence in the region keeps the market factoring in the scenario of oil flow disruptions—even though diplomatic channels remain open.
Adding spice comes from US actions outside the Middle East: US forces reportedly boarded a Venezuelan-linked tanker in the Indian Ocean as part of tightening restrictions on sanctioned oil shipments. For the market, this underscores that supply risks are not just a single point, but a broader network of operations. (asd)
Source: Newsmaker.id
