The conflict has already affected energy infrastructure. About 50 assets across the Gulf have been affected by drone and missile strikes over the past six weeks, with about 2.4 million barrels per day of refining capacity offline, JPMorgan said.
Crude Oil Price on April 10
Brent crude futures were up 83 cents, or 0.87%, at $96.75 a barrel at 0100 GMT. West Texas Intermediate futures rose $1.04, or 1.06%, to $98.91 a barrel.
Shipping traffic was severely disrupted through the Strait of Hormuz, which operated at less than 10% of normal levels on Thursday. This comes despite the ceasefire, as Iran warned ships to stay within its territorial waters when passing through the passage, Reuters reported.
US President Donald Trump’s comments also dampened investor sentiment. In a post on Truth Social, he said American military assets, ships, aircraft and personnel, along with additional ammunition and weapons, would remain in and around Iran until the final agreement was honored.
He warned that failure to uphold the terms could lead to more large-scale military action, though he added that such an outcome was unlikely. Trump also reiterated that Iran will not be allowed to have nuclear weapons and that the Strait of Hormuz will remain open and secure. For now, he said, the US military is on standby.
What’s next for the price?
Brokerage firm Macquarie noted that even if tensions ease, oil prices are likely to remain supported in the $85 to $90 range, moving slowly towards $110 as they pass through the Strait of Hormuz. It added that if disruptions extend into April, Brent could still rise to $150 a barrel.
Market experts believe that crude could enter a structurally higher price phase. Ajit Mishra, senior vice president at Religare Broking, said the current truce is temporary and it could take several months to return to pre-war levels of $70 to $75. In the near term, he expects crude to remain in the range of $80 to $85 on the downside and $95 to $100 on the upside.
Analysts also point out that the outlook for crude remains volatile with an upward bias as long as tensions persist. Continued disruptions in the Middle East, particularly around the Strait of Hormuz, are likely to keep supplies tight, supporting both Brent and WTI prices and maintaining inflationary pressures globally.
(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of The Economic Times)
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