Tight Fuel Supplies and Geopolitics Push Oil Prices Higher

The global oil market is experiencing a significant squeeze due to tight fuel supplies and geopolitical tensions. Brent crude futures have held near recent highs of $90 a barrel, but prices have since faded to around $87 early Thursday morning.

Traders are awaiting progress toward reopening the Strait of Hormuz, which has been blocked by US-Iran negotiations. The stalemate has led to concerns among top energy experts about a looming supply shock.

Samantha Dart, co-head of global commodities research at Goldman Sachs, warned that the 'global diesel-supply crunch is what keeps her up at night.' Similarly, Saxo Markets strategist Charu Chanana said volatility will remain elevated until Hormuz reopens and production outlook becomes clearer.

The International Energy Agency (IEA) released a report forecasting a 1.8 million-barrel-a-day deficit this quarter, more than double its previous estimate. The agency also warned that elevated prices are beginning to crush demand and projected the widest annual supply shortfall in five years.