Oil prices surged over 3% on Friday as geopolitical tensions escalated, with West Texas Intermediate (WTI) crude oil trading around $67.50 per barrel. The rally is driven by concerns about potential supply disruptions and repricing of risk premiums due to ongoing negotiations between the US and Iran.
The market’s focus on the Strait of Hormuz, a critical chokepoint for 20% of global oil supplies, has traders pricing in tail risks. Reports of personnel movements and security threats have also fueled concerns over spillover effects.
However, Saudi Arabia’s plans to increase oil production may offset some supply concerns, and policy expectations from the OPEC+ coalition will continue to influence market sentiment. The demand side remains resilient under high oil prices, but if risk premiums remain elevated, refining margins and downstream restocking rhythms will become key tests for market tolerance.
For now, U.S. crude oil is trading near $67.50, caught between bullish and bearish contention. If negotiations bring certainty, risk premiums may narrow, leading to a consolidation phase. But if uncertainty persists, prices could remain elevated due to ongoing geopolitical tensions.
Source: https://news.futunn.com/en/post/69371510/is-the-middle-east-powder-keg-about-to-explode-with?level=1&data_ticket=1770715472297499