Oil reached a price close to $110 per barrel on Thursday, marking the highest figure since July. This price increase is attributed to ongoing tensions in the Middle East and retaliatory actions by the Islamic Revolutionary Guard Corps of Iran, which led to attacks on eight oil tankers and two U.S. Navy destroyers in the Strait of Hormuz.
Forecast of Severe Oil Price Volatility
Oil and commodity analysts at Standard Chartered have predicted that severe oil price volatility will continue due to ongoing tensions in the Iran-U.S. conflicts in the third quarter of this year. These predictions reflect a lack of diplomatic progress and export restrictions from the Strait of Hormuz.
Read more: Taiwan's stock market closed down 0.73%
Standard Chartered also pointed to the strong performance of mid-term products, stating that some markets are under severe pressure as heat and drought have exacerbated logistical issues. The bank predicts that strength in mid-term spreads will continue, as diesel, gasoil, and jet fuel are performing better than gasoline. Ongoing conflicts are expected to bolster prices in long-term contracts.
Global and Regional Implications
At the annual APPEC conference in Singapore, participants were actively seeking solutions to address the prolonged conflicts in the Middle East. According to Standard Chartered, China's demand for crude oil imports and its ability to direct the supply of refined products to Asian markets is recognized as a source of flexibility in global oil flows.
Analysts predict that oil markets will remain vulnerable to price fluctuations. Although some alternatives may be available, excess capacity, inventory, and logistical flexibility have increasingly diminished. This situation makes price fluctuations in oil markets increasingly asymmetric, with price increases occurring more frequently and severely.
Meanwhile, natural gas prices in Europe continue to rise, reaching above €81 per megawatt-hour. While several LNG ships empty from Qatar are returning to the Gulf, there remains significant uncertainty about whether this indicates the start of sustainable exports. Additionally, LNG flows from the Gulf are significantly below pre-war levels.
Read more: HDFC Bank shares rise following positive financial results · Meeting on the Strait of Hormuz proposal postponed
