Brent crude prices rose above $110 per barrel in early Tuesday trading, reaching a three-week high. The increase reflects the continued closure of the Strait of Hormuz, preventing seaborne oil exports from the Persian Gulf region. As the US and Israel’s war with Iran enters its third month, the disruption to global oil markets continues to dominate sentiment among traders. The longer the conflict persists and the blockade of the strait remains in place, the more severe the impact of this energy shock is likely to be on the global economy, creating scope for further increases in oil prices. For now, the upside remains capped by hopes that ongoing talks may lead to the normalisation of maritime traffic in the region. A prolonged standoff is likely to push prices higher, while any positive developments could trigger a correction to lower levels.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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