International oil prices have hovered and remained steady over the last month only to be triggered by some recent geo-political developments as usual. The attacks in the Red Sea continue in the ongoing war in Gaza, while Ukrainian attack on Russian refineries has sent tremors across the international oil market.
However, despite the geopolitical tensions like the Israel-Gaza war, and the conflict in the Red Sea, and the Russia-Ukraine war, global analysts highlight that these conflicts have arguably had a limited impact on oil prices, which is reportedly because of excess capacity that OPEC+ owns as well as no major oil flow disturbance.
Nonetheless, there are also views that the risk premium exists and continues to solidify and increase as the geopolitical conflicts deepen. IEA has also revised its outlook for oil prices upwards with tighter supply and higher global demand amid the shipping disruptions in the Red Sea, which has sent prices moving upwards.WTI has seen prices spike due to international energy market volatility and the weak supply situation in the US.
And now it’s time for some decision as investors are closely watching the two-day US Federal Reserve meeting. Anticipations for a rate cut by mid-year are rife, which will boost demand in the US. This would mean a push for oil prices. The Brent crude oil benchmark is set to exceed $80 as per Bloomberg’s latest oil price survey. The Energy Information Administration too has lifted its outlook for Brent crude oil prices for this year and the next year in its recent monthly report due to the continuing and building uncertainty in the world as well as the expected extension of the OPEC+ production cuts.
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