Oil: Iran conflict keeps prices elevated – Danske Bank

FXStreet Insights Team FXStreet

Danske Research Team highlights that Brent has surged to around USD 124–126 per barrel as Iran-related tensions and a US naval blockade drive supply fears. They note Polymarket-implied odds of only a modest chance of normalised Hormuz traffic by end-May. Higher energy prices are feeding inflation and dominating cross-asset sentiment, especially in equities and FX.

Geopolitics drive Brent risk premium

"Oil prices climbed to a new high since the start of the US-Iran war with the June Brent contract reaching USD 124 as Trump shows no willingness to open his naval blockade without a nuclear deal."

"Oil prices climbed further, with Brent crude reaching USD 126/bbl at the time of writing, toppling the recent USD 119.5/bbl high from 9 March."

"The increase follows reports that the US is considering military strikes to break the negotiation deadlock with Iran, intensifying concerns over prolonged supply disruptions."

"Market sentiment remains cautious, with Polymarket investors assigning less than a 30% probability of normalised traffic through the Strait of Hormuz by the end of May and a 45% likelihood of the US lifting its naval blockade."

"Overall, the Iran situation and the oil price are still conducting the orchestra, as we can also see this morning."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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FXStreet Insights Team

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