By Li Xing, Financial Markets Strategist Consultant to Exness
Oil continued to climb as escalating geopolitical tensions in the Middle East intensified concerns over global supply risks. New disruptions affecting energy infrastructure in the region could continue to fuel fears of shortages on a global scale, although calls to spare energy sites could support hopes of lower tensions.
In the meantime, shipping traffic through the Strait of Hormuz remained largely at a standstill, keeping the region’s energy exports constrained and increasing uncertainty in the market. Traders are likely to remain highly attentive to any developments aimed at securing transit through the waterway, after failed plans to build a coalition to conduct military escorts.
Efforts to release additional volumes from strategic reserves could help limit the pace of the recent surge in prices in the short term. However, the impact of these measures may remain limited if supply disruptions persist or geopolitical risks intensify.
As a result, oil prices could remain volatile and highly reactive to developments in the Middle East. Any signs of de-escalation may weigh on prices, while renewed threats to the energy infrastructure in the region could trigger further upside pressure.
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