Brent Holds Above $70, Market Wary of Iran
Oil prices held steady after posting their biggest daily gain since October, following reports that a potential US military intervention in Iran could happen sooner than expected. The market has re-introduced a geopolitical “risk premium” into prices.
Brent held above $70 per barrel after rising 4.3% on Wednesday, while WTI traded above $65. An Axios report said a US military operation—if it occurs—could potentially last for weeks, and the Israeli government is also pushing a scenario that could lead to regime change in Iran.
The primary market concern is the potential for supply disruptions, given that the region accounts for approximately 50% of the world’s oil production. However, US President Donald Trump also faces political risks ahead of this year’s midterm elections if oil prices push up gasoline prices and depress consumer purchasing power.
On the diplomatic front, US-Iran talks have so far yielded little innovation. Tehran has said there is a “general understanding” regarding the framework of a potential nuclear agreement, while US officials have said Iranian negotiators will return to Geneva in two weeks with new proposals. The US also announced the issuance of visas to Iranian officials and executives related to the crackdown on protests.
Several analysts believe the potential for confrontation remains open as long as key issues remain unresolved. Beyond the Middle East, the market is also concerned about other issues, such as efforts to end the Ukraine war, which ended abruptly without clarity, and reports of a slowdown in drilling activity in OPEC+ member Russia, which could further reduce production.
Data-wise, sentiment was influenced by the American Petroleum Institute (API) report, which stated that US crude oil inventories fell by 609,000 barrels last week. Official data is scheduled for release on Thursday. In Asian trading, Brent crude rose 0.4% to $70.60 in April, while WTI crude (contract expiring Friday) rose 0.4% to $65.47; the more active WTI crude contract rose 0.5% to $65.35. (asd)
Source: Newsmaker.id
