Oil Falls, Hormuz Remains Vulnerable
Oil prices weakened after rising nearly 6% in the previous two sessions. Brent fell below US$89 per barrel, while West Texas Intermediate (WTI) hovered around US$83 per barrel.
The decline occurred as the market weighed two major sentiments: the still-escalating conflict between the United States and Iran and the possibility of a new ceasefire. The US launched another attack on Iran that day, while Tehran retaliated with missile and drone attacks on Kuwait.
Despite the ongoing conflict, diplomatic efforts continued. Iran said mediators had contacted Tehran with proposals to de-escalate tensions, while other reports suggested a 10-day strike request.
However, supply risks have not disappeared. Threats by the Houthi group in Yemen to blockade Saudi Arabia's Red Sea maritime routes have added to concerns. This crucial route is used by Saudi Arabia to export millions of barrels of oil through routes that avoid the Strait of Hormuz.
The Strait of Hormuz also remains a flashpoint. Shipping traffic has almost come to a standstill after several vessels were reportedly targeted by Iran. This situation has led some ship owners to offer large bonuses to crews to continue sailing through the region.
As a result, oil prices remain highly volatile. If diplomatic proposals develop positively, oil prices could fall again. However, if disruptions in Hormuz and the Red Sea continue, Brent could rise sharply again as the market still sees very limited global supply space. (asd)*
Source: Newsmaker.id
