Oil markets show resilience despite geopolitical pressure

Key takeaways:

• The latest US measures against Iran continue President Trump’s maximum pressure policy and could encourage Tehran to make concessions, although an immediate resolution to the current stalemate remains unlikely.
• The rise in oil prices largely reflects uncertainty around the Strait of Hormuz, difficulties in negotiations with Iran, a stronger US stance and wider regional tensions, rather than major changes in market fundamentals.
• Gulf oil flows remain difficult to determine, with widely varying estimates and limited visibility around tanker movements, while alternative export routes are helping supplies continue to reach global markets.
• The relatively contained oil price response despite major disruption demonstrates the adaptability and resilience of the global energy system, reinforcing the distinction between volatility and vulnerability.
• Global crude supplies remain available while demand expectations have weakened, but continued geopolitical uncertainty is likely to sustain a significant risk premium and substantial swings in oil prices.