Crude oil prices in the global market rose again on Monday. The situation in the Middle East at the start of Asian trading has once again drawn investors’ attention to energy supply risks.
According to Reuters, the price of Brent crude oil per barrel rose 1.27% to $105.64. The price of US West Texas Intermediate (WTI) was recorded at $93.11 per barrel after increasing 0.76%.
The latest surge in crude oil prices came as prospects for an immediate breakthrough in talks between the United States and Iran faded. US President Donald Trump has rejected Iran’s offer to end the war and reopen the Strait of Hormuz, but has expressed hope for further talks.
The Strait of Hormuz is a key route for global energy trade. The threat of disruption to oil shipments through the route directly affects global market prices. Fluctuations in oil shipments through the route in recent weeks have heightened market concerns.
However, war tensions are not the only factor driving prices in the market. Crude oil exports from Saudi Arabia and the United Arab Emirates improved in September. According to preliminary data from Kepler, crude oil exports from major Middle Eastern producers reached 12.8 million barrels per day in September.
This situation suggests that the global oil market is currently moving between two conflicting factors. On the one hand, tensions in the Middle East are raising supply concerns. On the other hand, improving exports from Gulf countries are trying to ease pressure on prices.
Global crude oil prices are important for a country like Pakistan that relies on imported energy. High global prices could put pressure on local fuel prices, import bills and overall inflation. Conversely, normalization of supply routes and diplomatic progress could create room for a decline in global prices.
For now, the direction of the market will largely depend on the US-Iran talks and oil shipments through the Strait of Hormuz. According to Reuters, Brent rose another 3.29 percent to $107.75 a barrel after an initial increase on Monday, while WTI rose 2.32 percent to $94.55 a barrel.
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