Oil Prices Fluctuate Amid Middle East Supply Concerns

Oil prices climbed in early Tuesday trading as investors monitored tensions in the Middle East, which could further disrupt global supplies. Brent crude futures rose by 0.15%, reaching $100.47 per barrel, while West Texas Intermediate (WTI) crude futures fell slightly by $0.07, or 0.06%, to $89.37 per barrel by 11:15 am PST.

Saudi Aramco CEO Amin Nasser warned that restoring global oil inventories could take up to two years if the U.S.-Iran conflict persists. Speaking at the Energy Intelligence conference in London, Nasser highlighted that pressure in the oil market would remain high until the Strait of Hormuz reopens and confidence returns. The conflict has severely impacted shipping through the Strait, a critical route handling around 20% of the world's oil and liquefied natural gas supplies.

Nasser noted that nearly 3 billion barrels of oil supply have been lost since the U.S. and Israel launched military strikes on Iran in late February. Around 1 billion barrels have been released from inventories, with most withdrawals coming from commercial reserves. He emphasized that the remaining 6 billion barrels in storage are "not practically available," stating that the system is already under strain.

The G7 governments recently agreed to release 100 million barrels of diesel and crude from emergency reserves amid growing concerns over energy supplies. Naeem Aslam, chief investment officer at Zaye Capital Markets, observed that oil prices are influenced by elevated geopolitical risks and expectations of potential supply improvements.