Trump Issues Iran Ultimatum, Oil Tensions Rise
Oil prices are stabilizing near their highest level in six months, after US President Donald Trump said Iran has a "maximum" of around 10-15 days to reach a deal on its nuclear program. This statement has the market reassessing the risks of conflict and supply disruptions.
Brent held around US$72 per barrel after surging more than 6% in the previous two sessions, while WTI hovered around US$67 per barrel. This rapid increase indicates the market is starting to place a greater "risk premium" on the Middle East.
On the geopolitical front, the US reportedly carried out a major deployment of force in the Middle East—reportedly the largest since 2003. At the same time, reports emerged that Trump was also considering the option of a limited strike earlier to pressure Tehran back to the negotiating table.
However, the risk the market fears most is not just the deadlocked negotiations, but rather the scenario of Iran disrupting or blockading the Strait of Hormuz, a vital route for energy exports from the Gulf states. Disruption at this point could immediately tighten global supply.
Signals of "tight supply" are also evident in market structure movements: Brent spreads (the difference between near- and far-dated contract prices) are increasingly trending toward tighter conditions in the short term. This means market participants are willing to pay more for readily available supplies compared to those delivered further away.
From a US fundamental perspective, bullish impetus also comes from inventory data: US crude oil stocks fell by around 9 million barrels, the largest decline since early September, according to the EIA. Oil product stocks also fell, adding to the sentiment that short-term supply is tightening.
5 key points below (key points)
Trump has given a 10-15 day deadline for the Iran nuclear deal - the market is increasingly sensitive to geopolitical headlines.
Brent -US$72 & WTI -US$67 remain near six-month peaks after a sharp two-day rally.
The biggest risk: the Strait of Hormuz (a crucial energy export route) if it is disrupted.
The market structure is tightening (indicating supply is approaching tighter) through spread movements.
US oil stocks fell by -9 million barrels (EIA), strengthening short-term bullish sentiment. (asd)
Source: Newsmaker.id
