Crude oil prices fell on June 9 as tensions between Israel and Iran eased with a temporary ceasefire. Brent crude futures declined by 0.60% to $93.72 per barrel, while U.S. West Texas Intermediate crude decreased by 0.50% to $90.83 per barrel. This follows a previous session surge of up to 5% due to Israeli strikes on Iran and attacks in Lebanon.
The recent pause in hostilities has provided some relief to the markets, though uncertainty remains about the durability of the ceasefire. Both nations have halted direct attacks after former U.S. President Donald Trump urged them to cease hostilities. However, Iran has warned of resuming strikes if Israel continues targeting Hezbollah in Lebanon.
Israeli Prime Minister Benjamin Netanyahu has stated that Israel will respond forcefully to any renewed Iranian aggression. Meanwhile, Trump cautioned Netanyahu that Israel might face conflict alone if it reignites war with Iran.
The Strait of Hormuz remains a critical point in ongoing peace discussions, with the U.S. pushing for its reopening. Before the airstrikes, this strategic waterway facilitated the passage of one-fifth of global oil supplies.
According to Haitong Futures, crude prices may trend higher due to tightening supply-demand conditions and falling global oil inventories. However, shipping activity through the Strait of Hormuz could take months to normalize, further delaying market recovery.
Background
The ongoing geopolitical tensions between Israel and Iran have significant implications for global oil markets, particularly with the strategic Strait of Hormuz remaining closed. This waterway is vital for global oil supply, and its closure has already led to market disruptions.
Looking ahead, the oil market faces potential volatility. Analysts warn that if the Strait of Hormuz remains closed, global supplies could tighten, especially if U.S. and Chinese measures to offset the impact wane.
