JAKARTA - Oil prices were slightly higher on Friday amid market caution over the Iran conflict, which has shown no signs of easing. Arab News, quoted on Friday, March 27, reported that investors remained on alert after US President Donald Trump extended a 10-day pause in attacks on Iranian energy facilities.
On Friday's trading, benchmark oil prices were virtually unchanged after strengthening in the previous session. Brent rose 69 cents to $108.70 a barrel at 10:23 Saudi time. Meanwhile, West Texas Intermediate (WTI) rose 24 cents to $94.72 a barrel.
Even so, on a weekly basis the two benchmarks still recorded a weakening. WTI, which has jumped 40 percent since the US and Israel attacked Iran on February 28, fell more than 3 percent in a week. Brent, which has risen more than 48 percent since the war began, also weakened by about 3 percent.
Phillip Nova analyst, Priyanka Sachdeva, quoted by Arab News, said that current oil prices are more influenced by the possibility of the length of the war than just political statements. According to him, direct attacks on oil infrastructure or protracted conflicts could push the market to raise prices faster.
Trump extended the deadline for Iran to reopen the Strait of Hormuz or face the destruction of its energy infrastructure until April 6. At the same time, the US has also sent thousands of troops to the Middle East. Trump is said to be considering the possibility of using ground forces to seize Kharg Island, Iran's strategic oil center.
An Iranian official told Reuters that the 15-point proposal from the US, delivered through Pakistan, was "one-sided and unfair".
According to the report, the war has reduced 11 million barrels of oil per day from global supplies. The International Energy Agency (IEA) even called this crisis heavier than the combined two oil shocks in the 1970s and the gas crisis due to the Russian-Ukrainian war.
Arab News also wrote, Macquarie Group analysts expect oil prices to fall quickly in the next few months if the war begins to subside in the near future, although it is likely to remain above pre-conflict levels. However, if the war continues until the end of June, oil prices are said to be able to rise to US$200 per barrel.
The impact is starting to be taken into account in Asia. Mukesh Sahdev, founder and CEO of XAnalysts, said countries in the region are starting to use buffer stocks and weighing demand adjustments.
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