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Oil: Supply risks keep prices elevated – Danske Bank

Danske Bank’s Danske Research Team notes that Oil remains supported near USD 100 as Middle East tensions and disruptions around the Strait of Hormuz weigh on supply and sentiment. The International Energy Agency’s reserve release and a US waiver on stranded Russian barrels are seen as only partly offsetting disruptions, with analysts expecting pressure on Oil prices to persist into the weekend.

Middle East conflict sustains supply disruption risk

"The oil price traded around the USD 100/bbl level yesterday and overnight, driven by still high tensions in the Middle East and growing concerns of prolonged disruption to traffic through the Strait of Hormuz."

"In Iran, newly appointed Supreme Leader Mojtaba Khamenei pledged to keep the Strait of Hormuz closed, and called for intensified attacks on US bases, further escalating geopolitical tensions in his first speech."

"While the IEA announced a record release of 400 million barrels from strategic reserves, scepticism remains about its impact, as the volume covers only 25 days of the current disruption, according to Reuters."

"Overnight, the US Treasury issued a 30-day waiver allowing countries to purchase stranded Russian oil at sea."

"While the waiver may ease short-term supply pressures, it risks undermining efforts to limit Russian revenue and has drawn criticism from US allies."

"Pressure on oil prices is likely to persist ahead of the close of the week."

(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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