US-Iran Talks Resume, Oil Prices Stable
Oil prices held steady following talks between the United States and Iran, although recent fighting has strained a ceasefire and hampered tanker traffic through the Strait of Hormuz. This has kept the market cautious about risks to global energy supply.
The International Energy Agency warned that a renewed escalation of conflict between the US and Iran could derail efforts to rebuild dwindling global oil inventories by the end of the year. The warning heightened concerns that supply disruptions could persist longer if tensions escalate.
Brent oil is trading above US$76 per barrel and is still headed for a weekly gain of around 6%, despite a correction on Thursday. Meanwhile, West Texas Intermediate is holding relatively steady at around US$72 per barrel.
Technical talks between Washington and Tehran are reportedly continuing, according to a US official. However, the status of the previous ceasefire remains unclear after President Donald Trump declared the deal over and US forces struck several Iranian targets over two days.
Meanwhile, Gulf energy flows are showing signs of resilience. The United Arab Emirates increased crude oil production to an all-time high last month. This move demonstrates Abu Dhabi's more aggressive response to disruptions caused by the war than other Persian Gulf states.
From a market perspective, oil prices remain potentially volatile as long as tanker traffic in the Strait of Hormuz has not yet recovered. Tracking data shows that vessel activity in Hormuz remained thin on Friday after nearly stopping on Thursday. The shift in Brent's market structure from contango to backwardation also signals that the market is beginning to perceive the risk of tighter supply, so investors will be closely monitoring production and sales allocations from Gulf producers like Saudi Arabia. (yds)
Source: Newsmaker.id
