Oil prices fall again: key factors behind the decline
9 February 10:21
Global oil prices started the working week with a decline. On Monday, the price of “black gold” fell by about 1% as tensions in the Middle East eased somewhat after news that the US and Iran were ready to continue dialogue.
This was reported by "Komersant Ukrainian", citing a Reuters report.
Brent crude oil futures fell 67 cents (1%) to $67.38 per barrel. US WTI crude oil also lost value, falling to $62.94 per barrel (down 61 cents).
The main factor calming investors was positive signals from Oman. Despite existing differences, Tehran and Washington agreed to continue indirect negotiations on the nuclear program.
This dispelled fears of an immediate large-scale military conflict that could block key oil supply routes.
The Strait of Hormuz under close scrutiny
The market remains sensitive to any news from the region, as about 20% of global oil consumption passes through the Strait of Hormuz. Despite the overall decline in prices, analysts warn of the fragility of the current stability.
“With further negotiations on the horizon, immediate fears of supply disruptions in the Middle East have eased significantly,” notes IG market analyst Tony Sycamore.
However, risks remain: Iran’s foreign minister has said he is ready to strike US bases in the event of an attack by the US. Such controversial rhetoric keeps the market highly volatile.
The Russian factor
In addition to the Middle East crisis, plans to restrict Russia’s revenues are putting pressure on the market.
The European Commission has proposed a complete ban on services that facilitate the maritime export of Russian crude oil.
India’s position has taken an interesting turn. The former largest buyer of Russian oil began avoiding new supply deals in April.
This move may indicate New Delhi’s desire to strengthen trade ties with Washington.
“Oil markets will remain sensitive to how widespread this shift away from Russian crude oil will be, whether India’s reduced purchases will continue after April, and how quickly alternative flows can be launched,” said Phillip Nova senior market analyst Priyanka Sachdeva.
