Middle East Oil Disruptions Spark Concern Over Future Price Shock

Despite ongoing hostilities in the Middle East and disruptions to oil exports, traders remain largely bearish on oil prices. The latest development is a decline in Brent crude below $80 per barrel and WTI below $75 after President Trump's statement that peace talks between the US and Iran had resumed.

The Iranian parliament is discussing a bill to ban access to the Strait of Hormuz for 'hostile' vessels, which could further restrict energy carrier passage. This has sparked concern about extended restrictions on tanker traffic in the Strait, which accounts for around 20% of global oil and gas trade.

Analysts expect a quick peace deal, but some warn that the war may not end soon. ING commodity analysts predict normal flows by the third quarter, while others believe post-war Middle East oil flows will be different due to alternative pipelines being built.