The oil market is nervous amid uncertainty over the conflict between Israel and Iran
19 June 10:13
Oil prices fluctuated on Thursday as investors refrained from opening new positions after US President Donald Trump gave conflicting signals about the potential US involvement in the conflict between Israel and Iran. This is reported by "Komersant Ukrainian" with reference to Reuters.
Price dynamics on world markets
According to OilPrice.com, Brent crude oil futures rose by 20 cents, or 0.26%, to $76.90 per barrel as of 10:08 a.m. Kyiv time. This happened after high volatility led to a 2.7% drop in prices.
U.S. West Texas Intermediate (WTI) for July delivery rose 25 cents, or 0.33%, to $75.39 per barrel. Earlier, it was falling by 2.4%.
The July contract for WTI expires on Friday, while the more active August contract fell 8 cents, or 0.11%, to $73.42 per barrel.
Analytical risk assessments
“The price still has a healthy risk premium as traders wait to see whether the next phase of the conflict between Israel and Iran will be a US strike or peace talks,”
– tony Sycamore, market analyst at IG, said in a client note.
Investment bank Goldman Sachs said on Wednesday that the geopolitical risk premium of about $10 per barrel is justified given the decline in Iranian supplies and the risk of broader disruptions that could push the price of Brent above $90.
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Trump’s position on the conflict
On Wednesday, President Trump told reporters that he may or may not decide to join the US in Israeli attacks on Iran. Direct U.S. involvement would expand the conflict, putting the region’s energy infrastructure at higher risk of attack, analysts say.
As a result of the unpredictability that has long characterized Trump’s foreign policy,
“markets remain nervous, waiting for clearer signals that could affect global oil supplies and regional stability,”
– said Priyanka Sachdeva, Senior Market Analyst at Phillip Nova.
Iran as a key player in the oil market
Iran is the third largest producer among OPEC members, producing about 3.3 million barrels per day of crude oil.
Approximately 19 million barrels of oil and petroleum products per day pass through the Strait of Hormuz along Iran’s southern coast, and there is widespread concern that fighting could disrupt trade flows.
Decisions of the US Federal Reserve System
Separately, the US Federal Reserve left interest rates unchanged on Wednesday, but planned two cuts by the end of the year. Fed Chairman Jerome Powell said that the cuts would be “data-driven” and that he expects consumer inflation to accelerate due to Trump’s planned import tariffs.
Lower interest rates would stimulate the economy and, as a result, oil demand, but this could increase inflation.
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