Oil Prices Rise as Hopes for US-Iran Peace Fade
Oil prices rose during Tuesday's trading (August 18) as prospects for a deal to end the conflict in the Middle East dimmed further. Iran announced it would adopt a more offensive military stance, while the United States refused to extend a temporary ceasefire agreement.
Brent crude rose 62 cents, or 0.7%, to US$91.49 per barrel at 04:08 GMT, having earlier touched its highest level since July 30. Meanwhile, West Texas Intermediate (WTI) climbed 75 cents to US$85.25 per barrel, after briefly reaching US$85.37—its highest point since July 31.
Market sentiment remained under pressure as developments regarding US-Iran peace talks and the recovery of tanker traffic through the Strait of Hormuz appeared to stall. This vital waterway remains a focal point due to severely restricted vessel traffic, while the conflict—triggered by US and Israeli strikes on Iran on February 28—shows no signs of abating.
Supply risks also heightened after a projectile struck a vessel exiting the Strait of Hormuz on Tuesday. In the Red Sea, Yemen's Houthi group launched missiles at vessels identified as Saudi military ships and four escort vessels, further stoking concerns regarding the security of energy shipping lanes.
Regarding market impact, oil prices are likely to remain in a high range as long as there is no US-Iran agreement and traffic through Hormuz remains abnormal. Analysts project that oil prices could trade between US$80 and US$100 per barrel in the short term. Should attacks on vessels continue or US oil inventories decline further, Brent and WTI could sustain their gains, while the risk of energy-driven inflation might once again weigh on global market sentiment. (asd)*
Source: Newsmaker.id
