Oil prices have surged: markets are spooked by the breakdown in negotiations with Iran
27 April 09:31
On Monday, April 27, oil prices rose after peace talks between the U.S. and Iran reached an impasse. This was reported by "Komersant Ukrainian", citing Reuters.
Investors fear that the situation in the Middle East could continue to affect energy exports, particularly oil and gas.
Brent crude rose to a three-week high
Brent crude oil futures rose by more than 2% during Asian trading and reached $107.97 per barrel. This is the highest level in about three weeks.
The main reason for the rise is concern over disruptions to energy supplies from the Middle East. Markets are closely monitoring the situation around the Strait of Hormuz, through which a significant portion of global oil and gas supplies traditionally passes.
Due to tensions in the region, shipping there remains limited, which is putting additional pressure on prices.
Despite the ceasefire that halted most hostilities following U.S. and Israeli strikes on Iran, the situation surrounding energy routes remains unstable.
Due to tensions in the region, traders have begun to revise their expectations regarding monetary policy. High oil prices could intensify inflationary pressures, which reduces the likelihood of a rapid rate cut in developed countries.
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Goldman Sachs Raises Brent Forecast
Goldman Sachs analysts have revised their year-end forecast for Brent crude oil prices. They now expect a barrel to cost $90, up from their previous forecast of $80.
This forecast is based on the assumption that exports from the Persian Gulf could return to normal levels by the end of June.
At the same time, experts warn that if oil reserves drop to critically low levels, prices could rise sharply and unpredictably.
What is the Strait of Hormuz
The Strait of Hormuz is a narrow sea passage between Iran to the north and Oman and the United Arab Emirates to the south. It connects the Persian Gulf with the Gulf of Oman and further on to the Indian Ocean.
It is one of the world’s most critical energy routes. A significant portion of maritime oil and gas shipments from the Persian Gulf countries passes through the Strait of Hormuz.
According to estimates by the International Energy Agency, in 2025 an average of about 20 million barrels of oil and petroleum products per day were transported through it, which is roughly a quarter of global maritime oil trade.
Why is the Strait of Hormuz so important?
Countries such as Saudi Arabia, Iraq, Kuwait, Qatar, the UAE, and Iran export oil and gas through this strait. If shipping traffic there is restricted, it immediately affects global prices for oil, gas, fuel, logistics, and inflation.
The problem is also that there is no quick, viable alternative for many shipments. Some oil can be rerouted via pipelines, but it is difficult to completely replace the maritime route through the Strait of Hormuz.
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