Oil prices ignore rise in Middle East geopolitical tensions, register 3% loss – Analysts downplay impact on oil market

Oil prices ignored the rise in geopolitical tensions in the Middle East and registered a loss of 3% last week.

Manish Raj, managing director of Velandara Energy Partners, said in statements reported by CNBC that investors do not believe Iran or Israel are interested in escalating tensions, and are only engaged in symbolic practices. largely to save face.

He said: “These reefs, according to his description, do not affect the oil market, which is sure not to disturb the flow of oil. “

As a result of that tension, the fear that the price of a barrel of oil will rise to $100 per barrel or higher did not materialize.

When it settled on Friday, US crude oil registered levels of $83.14 a barrel, the lowest level since late March, or days before the start of the current rising cycle when Israel targeted the Iranian consulate in Damascus on the first of these. April.

Oil markets were more concerned about the Israeli strikes targeting an Iranian nuclear facility, which would have prompted Tehran – OPEC’s third-largest oil producer – to respond, according to the co-founder of Agin Capital, John Kilduff.

Analysts and traders believe that the impact of increasing geopolitical tensions in the Middle East on oil futures prices is limited by the amount of supply in some types of higher grade crude.

Brent crude futures briefly closed at $92 a barrel last week, their highest since October, but a supply shortage would have caused a bigger rise.

HSBC bank analysts said that in addition to the unaffected supply, the OPEC+ alliance’s possession of plenty of spare production capacity “contributes to controlling oil prices,” while ‘ noting that “a considerable amount of geopolitical risk has already been taken into account.”