Oil Markets Sour as US-Iran Tensions Persist
US-Iran tensions are far from over as analysts warn of ongoing risks to global oil supplies. The latest flare-up between the US and Iran has sent West Texas Intermediate (WTI) oil futures plummeting to near $88.65 on the NYMEX exchange, struggling to move above the $90 mark during European trading hours on Friday.
Fears of further escalation in military aggression between the two nations have added to selling pressure on oil markets, despite US President Donald Trump's remarks that renewed attacks won't last 'too long'. However, Trump didn't rule out the possibility of a further military campaign with Iran.
Market experts doubt that the renewed tensions will normalize anytime soon. Analysts at Deutsche Bank highlight that the latest flare-up has fuelled renewed concerns over regional supply risks, noting that 'the recent flare-up between the US and Iran has led to fresh scepticism that energy flows through the Strait of Hormuz will normalise anytime soon.'
Strategists at Commerzbank also said that the situation between the US and Iran remains 'highly fluid, with little evidence yet of a durable de-escalation'. Meanwhile, analysts at TD Securities argued that renewed hostilities continue to highlight the 'fragility of any non-concrete deal or short-term de-escalation', with the bank stressing that 'Iran is not backing away from controlling the Strait, which ultimately keeps probability of escalation high as the US facilitates ship passages through the Omani route.'