Global oil prices showed a significant increase of over 2% amid escalating tensions in relations between the US and Iran, as well as due to the escalation of the situation on the Lebanese border. On Monday, following mutual strikes between Iran and the US and Israel’s order to advance troops in Lebanon, the market saw a revival.
This is reported by Finway
Price Dynamics and Key Influencing Factors
US crude oil futures rose by $2.29 to $89.65 per barrel, marking an increase of 2.62%. Meanwhile, Brent crude futures increased by $2.05, or 2.25%, reaching $93.17 per barrel.
The intensification of hostilities began after negotiations in Washington between the US, Israel, and Lebanon regarding conflict resolution. This weakened hopes for a quick new ceasefire agreement between the US and Iran, which had previously led the market to react with a decline in Brent and WTI oil prices by 1.8% and 1.7%, respectively, on Friday.
Impact of Geopolitics and the Situation in the Strait of Hormuz
US President Donald Trump announced that he would soon make a decision regarding the proposed agreement to extend the ceasefire with Iran, which was initiated in early April. The goal of the agreement is to provide additional time for peace negotiations and to find ways to achieve a final resolution of the conflict, particularly regarding Iran’s nuclear program.
Analysts note that tensions in the Strait of Hormuz, which is strategically important for global oil and gas supplies, significantly impact oil quotations. Tony Sycamore, an analyst at IG, emphasizes that concerns are growing over the mining of this key transport route, which could delay its recovery even after reopening.
“Even if an agreement is reached, it will not ensure the flow of supplies,” said Sycamore.
According to reports, Iran has laid additional mines in the strait following US Defense Secretary Pete Hegseth’s statement, which emphasized that such actions would be considered a violation of the ceasefire.
The Strait of Hormuz facilitates the transit of approximately 20% of the world’s oil and gas volumes. As a result of strikes by the US and Israel in February, Iran effectively blocked this route, which has already significantly impacted global energy markets.
At the same time, experts at Goldman Sachs warn that weak demand for oil from China and Europe could pose a risk to the projected decline of Brent prices to $90 per barrel in the fourth quarter and WTI prices to $83.
During Asian trading on Tuesday, May 26, following US strikes on Iran and amid tensions in the Strait of Hormuz, Brent futures prices surged again by more than 2%.