Oil Rises, Iran Conflict Uncertainty Maintains Supply Risk Premium
Oil prices rose on Friday (May 1), as efforts to end Iran's war have shown no significant progress and the risk of supply disruptions remains high. Tehran remains blockaded by the Strait of Hormuz, while the US Navy is said to be restraining Iranian crude exports. At the time of this article's publication, Brent crude rose nearly 1% to US$111.23, while WTI crude also rose 1.58% to US$107.35.
Meanwhile, Brent crude for July rose US$1.13 (1%) to US$111.53 per barrel at 11:03 GMT, while WTI crude gained 58 cents (0.6%) to US$105.65. On a weekly basis, Brent is poised to gain 5.8%, while WTI could potentially gain 11.8%.
The rally continued after the US and Israeli attacks on Iran in late February, which triggered the closure of the Strait of Hormuz and disrupted shipments of about a fifth of global oil and LNG supplies. The June Brent contract briefly reached US$126.41 per barrel before expiring on Thursday, its highest level since March 2022.
Although a ceasefire was said to have been in effect since April 8, diplomatic signals remained fragile. Iranian Foreign Ministry spokesman Esmaeil Baghaei said it was unrealistic to expect quick results from talks with the US, according to the IRNA news agency. Regionally, UAE presidential adviser Anwar Gargash said Iran's unilateral arrangements regarding freedom of navigation in the Strait of Hormuz were unreliable.
The risk of escalation also boosted intraday volatility, after a senior Iranian Revolutionary Guards official threatened a "long and painful attack" on US positions if Washington renewed its attacks. In Washington, US President Donald Trump was scheduled to receive a briefing on plans for a new series of military strikes to pressure Iran to return to negotiations, a US official told Reuters. The market is now monitoring developments in the Strait of Hormuz security, Iranian export flows, and the direction of US-Iran diplomacy as key determinants of oil risk premiums in the near term. (srh)*
Source: Newsmaker.id
