Oil Jumps 2% Above $107 Amid Rising Tensions Between the U.S. and Iran

Oil Prices Rise 2% Amid Escalating Tensions Between the United States and Iran

Oil prices rose by about 2% in trading on Monday, driven by stalled peace talks between the United States and Iran, which heightened concerns about global supply disruptions, especially through the Strait of Hormuz, one of the world's most important oil shipping routes.

Brent and West Texas Intermediate Hit High Levels

Brent crude futures recorded a significant increase, reaching $107.49 per barrel in some trades, while other data indicated it reached $107.3 at 05:49 GMT, an increase ranging from 1.83% to 2.05%.

Meanwhile, U.S. West Texas Intermediate rose to $96.17 per barrel according to data, while it recorded $95.93 in other trades, with an increase ranging from 1.62% to 1.88%.

Strong Weekly Gains, the Largest Since the War Began

Last week, oil achieved strong gains, with Brent crude rising by about 17%, while West Texas Intermediate rose by about 13%, marking the largest weekly gains since the war began, reflecting instability in global energy markets.

Political Tension Between Washington and Tehran Pressures Supplies

Hopes for reviving the peace process diminished after U.S. President Donald Trump canceled a trip that his envoys Steve Mnuchin and Jared Kushner were supposed to take to Islamabad, despite Iranian Foreign Minister Abbas Araghchi arriving in Pakistan.

Developments indicate an indirect escalation between the two sides, impacting energy markets and increasing fears of further supply disruptions.

Strait of Hormuz Sees Decreased Shipping Activity

Reports indicated that traffic through the Strait of Hormuz remained limited, with data from Kepler showing that only one oil products tanker crossed the strait into the Gulf yesterday, amid shipping restrictions and rising regional tensions.

Analysts: The Ball is in Iran's Court and Time is Pressuring the Market

Tony Sycamore, a market analyst at IG, stated that recent developments “put the ball directly in Iran's court, with time pressing,” noting that Tehran may have to reduce production from its aging oil fields if its storage capacity fills up.

Goldman Sachs Raises Oil Price Forecasts

Goldman Sachs raised its oil price forecasts for the fourth quarter, expecting Brent crude to reach $90 per barrel and West Texas Intermediate to reach $83 per barrel, due to declining production in the Middle East.

The bank's analysts, led by Dan Struyven, noted in a memo issued on April 26 that the upside risks for oil prices are greater than the baseline forecasts, with rising refined product prices and the possibility of supply shortages amid an unprecedented shock in the global energy market.