By Daniel Takieddine, Co-founder and CEO, Sky Links Capital Group
Oil prices trended higher today, extending yesterday’s rebound in reaction to geopolitical concerns over rising US-Iran tensions. The market is increasingly hedging against the risk of military escalation, with fears centering on potential supply disruptions in the Persian Gulf. The Strait of Hormuz, a crucial chokepoint that carries roughly one-fifth of global oil flows, remains in focus. The concerns were further supported by reports of heightened military activity in the region, alongside claims of temporary disruption, keeping uncertainty and volatility elevated.
On the diplomatic front, the Geneva talks showed limited progress with clear gaps remaining. While Tehran signaled an understanding of a broad framework, US officials stressed that key red lines were not addressed. Furthermore, the US reiterated that military intervention remains on the table. The rhetoric was enough to keep markets on edge.
Declining inventories provided additional price support, with API data pointing to a draw in US crude stocks. Attention now turns to the EIA figures for confirmation. Still, the upward momentum could be capped by broader supply expectations. Expectations of an increase in OPEC+ output in April and forecasts of an oversupply could weigh on the market over the longer term.