Oil prices surged more than 3% on Tuesday amid growing concerns about the fragility of the US-Iran ceasefire.
Global oil prices surged more than 3% on Tuesday as concerns grew that the ceasefire between the United States and Iran was on the verge of collapse, reigniting market worries about supply disruptions and continued tensions in the Middle East.
The surge followed comments by the US president indicating that the ceasefire agreement was in a precarious position, increasing uncertainty in global markets and raising fears of a renewed escalation of the conflict.
Oil prices surge
Brent crude rose more than 3% to surpass $107 a barrel, while West Texas Intermediate crude climbed more than 3% to nearly $102 a barrel, amid ongoing concerns about global energy supplies.
This marks the second consecutive day of gains as the global oil market remains tight, particularly given the limited prospects for a full reopening of the Strait of Hormuz in the near future.
The Strait of Hormuz Increases Pressure on Energy Markets
The crisis in the Strait of Hormuz remains the most influential factor on oil price movements, as it is one of the world's most important maritime chokepoints for crude oil transport.
Investors fear that continued political and military tensions in the region could disrupt oil flows for an extended period, potentially driving prices even higher in the coming weeks.
Concerns about declining global supplies have also contributed to increased buying activity in oil markets, coinciding with rising energy demand in major markets.
Markets Await Inflation Data and Global Energy Reports
Investors are awaiting the release of US inflation data today, specifically the Consumer Price Index (CPI), due to its direct impact on the US dollar and energy prices.
Markets are also anticipating the release of the monthly forecasts from the US Energy Information Administration (EIA) later today, in addition to reports from the International Energy Agency (IEA) and OPEC on Wednesday, to gain further insights into supply and demand levels in the global oil market.
JPMorgan Predicts Oil Will Remain Near $100
On the other hand, JPMorgan Chase expects global oil prices to remain near $100 per barrel for most of this year, even if the Strait of Hormuz reopens next month.
The bank indicated that the return of oil supplies from the Middle East to normal levels may take longer than anticipated, which could lead to continued disruptions in the global energy market and support prices at high levels.
Oil Price Forecast for the Coming Period
Oil prices remain directly linked to geopolitical developments in the Middle East, along with US economic data and the actions of global central banks.
Analysts believe that the continuation of current tensions could push oil prices higher, especially if supply concerns persist or efforts to restore stability to the region are delayed.
Conversely, any political breakthrough or progress in peace negotiations could alleviate current pressures and limit the rise in oil prices.
