Oil Holds Above $100, Emergency Measures Unabated Iran Risk Premium
Brent oil prices closed above US$100 on Friday (March 13th) for the second consecutive session, as the Iran war entered its third week and tanker traffic through the Strait of Hormuz remained effectively halted. This condition kept the supply risk premium high despite a number of policy measures from the US and its allies to ease the surge in energy prices.
Brent oil futures rose 2.67%, or US$2.68, to close at US$103.14 per barrel. US crude oil (WTI) rose 3.11%, or US$2.98, to close at US$98.71 per barrel. The increases occurred amid a market that continued to assess the risk of physical supply disruptions as more dominant than short-term stabilization measures.
Prices remained high despite the International Energy Agency (IEA) approving the release of 400 million barrels from strategic reserves—the largest stock release in history. The market is also monitoring the US policy of granting India a 30-day waiver to purchase sanctioned Russian oil, as well as President Donald Trump's consideration of relaxing the Jones Act, which requires US-flagged vessels to transport goods between domestic ports, including oil and gas, as part of a cost-cutting effort.
However, market participants believe these measures have not addressed the main sources of pressure, namely the navigational obstruction in Hormuz and the uncertainty surrounding the conflict's duration. With tanker traffic still stalled, additional supply from the release of stocks or cargoes "overboard" is likely to be viewed as a temporary cushion, not a solution to the ongoing logistical disruptions.
Investors continue to monitor developments in the Middle East. In a statement overnight, Trump signaled that the conflict is not nearing an end, emphasizing US military capacity and urging the public to "wait to see what happens" with the Iranian regime on Friday.
These signals reinforce the perception that the energy risk premium is likely to persist, making oil prices more sensitive to escalation and information regarding the status of the Strait of Hormuz than to limited policy intervention. (yds)
Source: Newsmaker.id
