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Oil: Middle East conflict and policy risks steer prices – BNY

Bob Savage at BNY emphasizes that investors are using traffic through the Strait of Hormuz as a key gauge of energy risk, with ceasefire doubts keeping volatility high. A potential U.S. Senate authorization for renewed strikes on Iran and ongoing war-related supply concerns are central to Oil pricing. Despite this, Brent and WTI are currently lower, while Omani and Dubai benchmarks rise.

Hormuz tensions and Iran risks in focus

"Tracking the ships going through the Strait of Hormuz continues to be the key risk barometer for investors as they watch for supply relief in energy. Ceasefire doubts rose yesterday after Iran and the U.S. exchanged fire and UAE suffered significant missile attacks, but that has not escalated today."

"A group of Senate Republicans is drafting a military authorization for potential renewed strikes on Iran, anticipating a fresh notification if hostilities resume. Under the War Powers Act, such authorization could receive expedited Senate consideration within the first 30 days of renewed conflict."

"The proposed authorization is expected to limit the deployment of ground troops and set a finite timeframe for the conflict. This move follows President Trump’s recent statement that the initial period of conflict has ended and an increase in tensions over control of the Strait of Hormuz."

"The focus for the day will remain on the truce with Iran and the ongoing hopes that Project Freedom will deliver energy relief."

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

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The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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