Oil prices are rising on global markets: key factors driving the increase
26 February 11:18
On Thursday, February 26, oil prices rose slightly as the world awaited the outcome of important negotiations between the US and Iran. The market hopes that diplomats will be able to stop the war in the Middle East, as hostilities could disrupt regular fuel supplies.
This was reported by "Komersant Ukrainian", citing a Reuters publication.
Futures for Brent crude oil rose to $71.06 per barrel, adding about 0.3%. US WTI crude oil also rose in price, reaching $65.58.
Fujitomi Securities analyst Toshitaka Tazawa notes that the market is now completely focused on avoiding armed conflict.
According to him, even a short-term conflict could instantly push the price of WTI above $70, although prices are likely to return to their usual range afterwards.
Prolonged hostilities pose a much greater threat, as Iran is the third-largest producer within OPEC.
Diplomatic pressure
According to Reuters, the third round of talks involving US envoys Steve Witkoff and Jared Kushner is scheduled to take place in Geneva today. Washington has already deployed additional forces in the region in an attempt to force Tehran to review its nuclear program.
Against this backdrop, Saudi Arabia has begun implementing a plan to urgently increase production and exports. Riyadh wants to insure the market in case possible US strikes on Iranian territory paralyze shipping in the region.
OPEC’s+ position
The OPEC+ alliance is already considering increasing production by 137,000 barrels per day in April. This decision is being prepared in response to peak summer demand and rising prices triggered by tensions between Washington and Tehran.
However, the rapid rise in raw material prices is currently being slowed down by internal data from the United States. According to a report by the Energy Information Administration, US oil reserves rose by an impressive 16 million barrels last week.
This is the largest increase in the last three years, which significantly exceeded market expectations and is currently keeping prices from skyrocketing.
