The oil market opened on a Thursday morning to a choppy opening due to rising geopolitical risks, which saw a rapid surge in oil prices. This was evidenced by the rise in price per barrel of Brent crude beyond the $120 level and up to $122, the highest seen since 2022. This was after President Donald Trump of the US sent strong hints that he will not lift a blockade of Iranian ports.
Rising tensions reshape market confidence
Analysts noted that the blockade could significantly restrict oil flows from the region. Because of this, buyers rushed to secure supplies, further driving prices higher. In addition, fears of escalation in the conflict added another layer of pressure to already strained markets.
UAE exit adds fuel to the price surge
Moreover, an unforeseen move by the United Arab Emirates leaving both OPEC and OPEC+ was a significant factor. This created concerns about the possibility of future collaboration on production. This way, traders perceived the move as a lack of coordination, which contributed to the rise in oil prices.
Also, according to energy experts, lack of unity regarding production may make price fluctuations happen even more often. This means that the costs for fuels may increase in the following weeks for consumers. Overall, geopolitical unrest coupled with changes in alliances has caused a storm in the oil markets.
