Oil Rises Again, Hormuz & Geneva Lead the Way
Oil prices strengthened as the market weighed one major question: whether US-Iran talks would be enough to contain the conflict, while Russia-Ukraine peace negotiations stalled again without a clear outcome. The combination of these two geopolitical trends made it difficult to remove the "risk premium" from oil prices.
Global benchmark Brent rose to near $69 per barrel after closing nearly 2% lower the previous day. Market concerns were further fueled by an Axios report that suggested that a US military operation could be a multi-week campaign, rather than a short operation.
The most sensitive risk of conflict lies in the Strait of Hormuz—a vital energy export route for the world's largest oil-producing region. Nuclear talks have so far yielded no final conclusion: Iran claims there is a "general agreement" on the terms of a potential deal, while the US says Iranian negotiators will return to Geneva with a new proposal in two weeks.
At the same time, the Ukraine peace process has again fueled tensions. The second day of talks in Geneva ended quickly (around two hours / less than 90 minutes in market reports), with Ukrainian President Volodymyr Zelenskiy accusing Moscow of deliberately dragging out the process. Russia called the talks "difficult but professional" and hinted that another round would be held soon.
Iranian tensions were also felt on the ground: Tehran announced it was temporarily closing part of the Strait of Hormuz for several hours for military exercises, while the US reportedly sent a second aircraft carrier to the region. Oilytics consultant Keshav Lohiya believes prices are likely to remain stable in the $65-$70 range, as there are signs of diplomatic progress despite increased military activity.
In the latest trading, April Brent rose 2.4% to $69.07 per barrel at 12:11 p.m. in London, while March WTI traded at $63.88 per barrel. The market is now waiting to see whether the US-Iran "progress" actually reduces risk, or whether the Hormuz dynamics and the Geneva impasse will actually make the geopolitical premium last longer. (alg)
Source: Newsmaker.id
