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Oil Prices Stabilize, Geopolitical Tensions Resurface Amid Diplomatic Hopes
(MENAFN- MENAFNEditorial) On Tuesday, WTI crude oil fell below $90 during the trading session, on fresh indications that Iran is prepared for a swift diplomatic resolution to the conflict with the US. Over the past five consecutive sessions, the price has fallen by almost 12%, retreatin‘ once again from ’he ‘intervention zone’ above $100, where we have repeatedly seen intensified peace-building efforts from both sides.
Physical conditions have added to the support. A disruption to Libyan output has removed part of the country's crude supply from the market, while renewed instability around the Red Sea continues to leave key shipping routes exposed. With US strategic reserves at multi-decade lows, the market has a more limited buffer against further supply losses.
At the same time, continued efforts to move crude through the Strait of Hormuz are helping to preserve regional flows and contain further gains. Pakistan's mediation efforts with Tehran could also reduce the risk of a broader escalation.
Looking ahead, attention could turn to the implementation of the new US measures on Wednesday and upcoming UN meetings with Gulf countries. Signs of renewed dialogue could ease supply concerns and allow crude to resume its recent decline. Conversely, failure to relaunch diplomatic talks or worsening conditions in the Middle East could tighten the physical market further.
Physical conditions have added to the support. A disruption to Libyan output has removed part of the country's crude supply from the market, while renewed instability around the Red Sea continues to leave key shipping routes exposed. With US strategic reserves at multi-decade lows, the market has a more limited buffer against further supply losses.
At the same time, continued efforts to move crude through the Strait of Hormuz are helping to preserve regional flows and contain further gains. Pakistan's mediation efforts with Tehran could also reduce the risk of a broader escalation.
Looking ahead, attention could turn to the implementation of the new US measures on Wednesday and upcoming UN meetings with Gulf countries. Signs of renewed dialogue could ease supply concerns and allow crude to resume its recent decline. Conversely, failure to relaunch diplomatic talks or worsening conditions in the Middle East could tighten the physical market further.
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