Washington – Oil prices ended sharply higher on Monday, with operators fearing a suspension of negotiations between Washington and Tehran to end the conflict in the Middle East, while strategic crude reserves are dwindling.
“The market has been waiting for an agreement for several weeks, in vain,” commented Andy Lipow, of Lipow Oil Associates, to AFP.
Donald Trump assured that “discussions continued at a rapid pace with the Islamic Republic of Iran,” in a message published Monday on his Truth Social network.
The American president’s assertion contradicts the announcement by the Iranian press agency Tasnim, according to which Tehran has broken off indirect dialogue with Washington, in particular because of the Israeli offensive in Lebanon.
For the oil market which had the hope of an imminent agreement between Tehran and Washington at the end of last week, this prospect seems to be receding, and with it that of a return to normal of exports of hydrocarbons from the Gulf through the Strait of Hormuz.
About a fifth of the petrole The world normally transits through this bottleneck, controlled by Tehran since the first Israeli-American strikes in Iran at the end of February.
Consequently, the price of a barrel of Brent from the North Sea, for delivery in August, which is the first day of use as a reference contract, gained 4.24% to US$94.98.
It jumped to US$97.79 during the session.
Its American equivalent, the barrel of West Texas Intermediatefor delivery in July, rose 5.49% to US$92.16, after hitting a high of US$94.78.
Another point of concern: “the market fears that we are engaged in a race against time, while strategic oil reserves and commercial stocks continue to be depleted, waiting to be replenished with the reopening of the Strait of Hormuz”, notes M. Lipow.
In mid-May, the International Energy Agency (IEA) had already sounded the alarm in the face of a “record” meltdown in oil reserves as the war in the Middle East bogged down.
The measures to release strategic reserves announced by different countries help to cushion the shock, but stocks “cannot last forever”, agrees Phil Flynn, of The Price Futures Group.
The oil market could enter a “red zone”, with a shortage of offers in “July or August”, in the absence of a lasting outcome to the conflict, the executive director of the IEA, Fatih Birol, warned on May 21.
