US-Iran Conflict Drives Oil Prices Higher as War Lingers

Oil producers and traders are bracing for a prolonged war between the United States and Iran in the Persian Gulf, which could lead to higher oil prices for an extended period. The Asia Pacific Petroleum Conference (APPEC) attendees expressed concerns about the escalating tensions in the Middle East, with one delegate stating that achieving peace would be 'a war of egos'.

The US president and Iranian leadership refuse to accept anything less than a decisive victory, making it challenging for a quick resolution. The Asian oil industry wants President Trump to leave the Persian Gulf and let local countries deal with the situation, but this is an unlikely scenario.

Futures prices have already surged above $100 per barrel, while physical delivery costs can be significantly higher. Traders are paying more attention to physical prices due to rising insurance and freight rates. The benchmark daily rate for a very large crude carrier has hit a record high of almost $800,000.