US-Israel-Iran War 100 Days, Oil Prices Still High

World oil prices are still fluctuating amid the US-Israel-Iran war which has entered its 100th day. Although there is hope for a diplomatic agreement, the global energy market is still overshadowed by the risk of supply disruptions from the Middle East region. (Photo: Unsplash)

JAKARTA - Brent crude prices are still holding high as the US-Israel-Iran war enters its 100th day. Although there is hope for a peace deal, the market is not really calm.

Citing an Anadolu Agency report, Sunday, June 7, Brent closed at USD93.09 per barrel on June 5, the last trading day before the conflict entered its 100th day. The figure is still 28.4 percent higher than before the war.

Before the US and Israeli attacks on Iran on February 28, Brent closed at USD72.78 per barrel. Prices immediately jumped to USD82.37 on March 2 after reports emerged that Iran's Supreme Leader Ayatollah Ali Khamenei was dead.

The increase has become sharper after Iran retaliated by attacking energy infrastructure in the Middle East. Uncertainty over oil shipments through the Strait of Hormuz has also made the market anxious.

The Strait of Hormuz is an important route for the world's oil shipments. If this route is disrupted, global oil supplies could be affected.

On March 6, Brent rose to USD92.69 per barrel. Its weekly gain was 27.9 percent, the fastest since April 2020. Prices then jumped to USD119.50 per barrel on March 9.

But prices have also turned quickly. News that the conflict could end soon, steps related to strategic oil reserves, and softer signals from Washington have caused Brent to fall. On March 10, prices fell to USD81.16 per barrel.

Throughout March, the oil market moved wildly in a range of around USD75 to USD119 per barrel.

A two-week temporary ceasefire between the US and Iran, which took effect from April 8, had put pressure on prices. Brent fell to USD90.40 per barrel in that day's trading, weakening around 17.3 percent from the previous close.

But rising pressure is back. The risk of security in the region has not disappeared. The shipping lane is still overshadowed by uncertainty. The strong statements of US and Iranian officials during the negotiations also make the market hesitant.

According to Anadolu Agency's report, Brent reached USD126.41 per barrel on April 30. That's the highest level since the war started and the highest in almost four years. The increase came after reports that US-Iranian negotiations were stalled and President Donald Trump was considering additional military options.

In early May, markets were slightly relieved after reports emerged that the US was close to signing a one-page deal to end the war with Iran and expand nuclear talks. Brent fell back below USD100 per barrel.

Even so, prices did not fall too far. Throughout May, Brent still moved in the range of USD91 to USD115 per barrel. The reason is the same: the statements of both parties are often contradictory, the conditions on the ground are uncertain, and the security risks in the Strait of Hormuz remain high.

Since May 27, Brent has remained below USD100 per barrel. However, that level does not mean that the market is safe. Geopolitical risk premiums are still attached to oil prices.

The direction of oil prices in the future still depends heavily on the continuation of the war and the fate of diplomatic negotiations. As long as both are not clear, oil prices are expected to remain sensitive to new developments.