economy
Oil shock 'far from over' as analysts warn of new Middle East risk premium
Commodity analysts warn that oil price volatility is likely to persist, despite the U.S.-Iran peace agreement.
TL;DR
- Oil price volatility is likely to continue despite a U.S.-Iran peace deal.
- Global oil inventories have declined due to the closure of the Strait of Hormuz and will take time to rebuild.
- Analysts warn of an ongoing 'geopolitical risk premium' in energy markets.
- Shipping traffic through the Strait of Hormuz may not return to pre-conflict levels soon.
- Multiple pressures, including inventory drawdowns and risks in the Strait, contribute to the challenging recovery.
- Oil prices are predicted to hover around the low $90s into the third quarter.
- Potential for higher oil prices and associated inflationary implications remain.
- Challenging economic data, particularly from South Asia, could increase market volatility.