dechevm / Depositphotos.com
DUBAI — Volatility in global oil markets is continuing into the weekend, despite a fragile and temporary ceasefire between the United States and Iran, one increasingly strained by ongoing Israeli military activity in the region.
Analysts say prices initially dropped following the announcement of a two-week truce, but markets remain on edge as physical oil supply routes have yet to normalize. While futures markets quickly reflected easing geopolitical risk, actual shipments remain constrained, creating a gap between paper pricing and real-world supply.
At the centre of the instability is the Strait of Hormuz, a critical shipping route for roughly 20 per cent of the world’s oil. Despite expectations of reopening, access remains restricted, with Iran requiring vessels to obtain permission and controlling passage through the waterway.
Industry leaders say traffic through the strait remains minimal, with hundreds of tankers waiting to move oil out of the الخليج as shipping companies and insurers remain cautious due to security concerns, including mines and potential renewed attacks.
Iran has outlined a framework for controlling traffic during the ceasefire, including designated routes and potential fees for passage. Analysts say those conditions fall short of restoring normal operations and have raised concerns among Western governments and Gulf producers.
The competing positions highlight a widening gap between the sides. The United States and its allies are pushing for full and immediate reopening of the strait, while Iran is seeking to retain control as leverage in broader negotiations, including demands tied to sanctions and regional military activity.
Complicating matters further, Israeli operations in Lebanon have continued during the ceasefire period, prompting warnings from Iran and raising doubts about how long the truce can hold.
Observers say the situation reflects deeper, unresolved tensions stemming from the wider conflict involving the United States, Israel and Iran, with both sides holding firm on key demands and little indication of compromise.
With the ceasefire limited in scope and critical issues still unresolved, analysts say volatility is likely to persist in the near term.
For now, there is no clear path to a full resolution, leaving global energy markets exposed to continued disruption and uncertainty.
Comments