Middle East Risks May Lift Oil Briefly Before Oversupply Returns, Macquarie Says
Renewed tensions in the Middle East may lift oil prices in the short term, but ample global supply should drive a sharp pullback once geopolitical risks ease, Macquarie said in a note on Wednesday. Macquarie expects the latest US-Iran tensions to remain temporary as both sides face economic and political limits. The firm said the current rally may reflect short covering rather than a lasting shift in market fundamentals. Brent moved toward $80 per barrel as renewed US-Iran tensions revived concerns over regional oil supplies, Macquarie said. Iranian vessel attacks, tighter US sanctions, President Donald Trump's military strikes and threats of further action also raised fresh concerns over shipping through the Strait of Hormuz, the firm said. The latest escalation also renewed concerns over shipping through the Strait of Hormuz. Insurers advised clients to delay voyages while shipowners reviewed transit risks through the key global oil corridor. Before the latest conflict, shipping activity had steadily improved. The seven-day average for crude, condensate and clean product flows recovered to about 54% of pre-war levels, narrowing the supply gap to about 8 million b/d..
Renewed tensions in the Middle East may lift oil prices in the short term, but ample global supply should drive a sharp pullback once geopolitical risks ease, Macquarie said in a note on Wednesday.
Macquarie expects the latest US-Iran tensions to remain temporary as both sides face economic and political limits.
The firm said the current rally may reflect short covering rather than a lasting shift in market fundamentals.
Brent moved toward $80 per barrel as renewed US-Iran tensions revived concerns over regional oil supplies, Macquarie said.
Iranian vessel attacks, tighter US sanctions, President Donald Trump's military strikes and threats of further action also raised fresh concerns over shipping through the Strait of Hormuz, the firm said.
The latest escalation also renewed concerns over shipping through the Strait of Hormuz.
Insurers advised clients to delay voyages while shipowners reviewed transit risks through the key global oil corridor.
Before the latest conflict, shipping activity had steadily improved.
The seven-day average for crude, condensate and clean product flows recovered to about 54% of pre-war levels, narrowing the supply gap to about 8 million b/d..