Oil Remains Above $100 – Traders Increasingly Nervous Amid Iran Conflict

At the start of the European trading session, Brent crude oil prices are trading above $106 and remain above the $100 per barrel mark. The Gulf war, which has now been ongoing for over a week, is making traders increasingly nervous about the impact a prolonged conflict could have on global energy supplies.

The Persian Gulf region accounts for approximately one quarter of global oil production, with the majority transported in tankers through the Strait of Hormuz. This shipping route is effectively blocked due to the risk of attacks, meaning the world’s most important oil export hub is effectively cut off from the market.

World’s Most Important Oil Export Hub Effectively Cut Off from Market

Given that the conflict has already entered its second week with no obvious path or timeline for a ceasefire, it is hardly surprising that oil traders are pricing in a future scenario of reduced supplies, leading to higher prices.

This dynamic is likely to intensify the longer the conflict continues without realistic prospects for de-escalation, creating room for further price increases per barrel.

Ricardo Evangelista – Senior Analyst, ActivTrades

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