Oil Prices Surge Amid Fading Peace Hopes
Oil prices rose on Tuesday as prospects for a deal to end the Middle East war receded, with Brent crude futures climbing 62 cents to $91.49 a barrel and US West Texas Intermediate crude futures up 75 cents to $85.25 a barrel.
Iran's Aggressive Stance
Iran has announced that it will adopt a "fully offensive" military posture, according to a senior Iranian official, as efforts to end the war have stalled. The US has ruled out extending a temporary ceasefire pact, heightening concerns about energy supply.
Uncertainty Lingers
While a deal-related uncertainty lasts, oil prices are expected to range within $80 and $100 a barrel in the near term, according to DBS Bank's head of energy research. The lack of a deal is expected to have an impact on oil price expectations further out in 4Q and even in 2027.
Strait of Hormuz Remains Closed
The Strait of Hormuz, a critical shipping lane, remains closed due to ongoing attacks by Yemen's Houthis, with only single-digit crossings reported. The US and Israel launched attacks on Iran on February 28, and outward progress on peace talks has halted.
Expert Insights
Tim Waterer, chief market analyst at KCM, said: 'Oil has jumped to start the week as U.S.-Iran relations look increasingly shaky.'
Suvro Sarkar, DBS Bank's head of energy research, added: 'The lack of any kind of deal will have an impact on oil price expectations further out in 4Q and even in 2027.'
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