Analysts suggest that since the fundamentals of the oil market have not changed, the recent jump in oil prices brought on by the Iran-Israeli crisis should be considered a transitory phenomenon.
The Gulf is still releasing petrol and oil. Edward Bell, Acting Chief Economist & Head of Research, Emirates NBD, told Khaleej Times that some customers are probably trying to obtain supplies soon to make up for any possible supply disruption, which is driving up oil prices.
The main way the ongoing Israel-Iran conflict dynamics have been expressed in the market is through oil prices. Markets are pricing in supply security worries even though oil assets, such as production facilities, export infrastructure, or ships, have not been specifically targeted in the two nations’ firefight.
The announcement of the first strikes on June 13 caused an immediate spike in oil prices. After reaching a high of USD 78.50/b, Brent futures have been reacting to news stories, climbing on expectations that the violence may intensify or expand, and falling on market signals of a possible diplomatic resolution. As markets price in a variety of scenarios, many of which appear to lean upward, such as assaults on oil infrastructure or the closing of the Strait of Hormuz, volatility in oil prices has increased. Since the beginning of the conflict between Russia and Ukraine, options markets have never been more positively positioned.
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