Oil prices seen swinging amid US-Iran uncertainty

Global oil prices will fluctuate between US$95 and US$120 per barrel in the near future due to the Middle East conflict, said Kyle Shostak, director of Navigator Principal Investors.

“My reading of the situation is that the Trump administration is hopeful that the blockade of the Iranian oil supplies, a big amount of which is going to China, will incentivise Beijing to convince its counterparts in Tehran to agree to a new round of meaningful negotiations. Before then, the oil will continue to behave chaotically in the range of US$95 to US$120 per barrel,” Shostak said.

He believes that the upper price level for Brent oil will be around US$115-120 per barrel.

The expert did not express optimism about a near-term resolution of the Middle East conflict and warned of a potential new escalation in the region that will impact global oil prices.

“Despite the market at the moment seems to be somewhat prematurely seduced by the de-escalation scenario, betting on the resumption of the United States (US)-Iran negotiations, and even more naive hopes to resume the traffic through the Hormuz Strait, I am at the opinion that a more realistic expectation will involve a repetition of the military actions, one way or another, albeit on a more reduced scale,” Shostak added.

On April 11, Iran and the US began talks in Islamabad after Trump announced an agreement with Tehran on a two-week ceasefire.

On April 12, Vice President JD Vance said that the two countries failed to reach an agreement during the negotiations and that the US delegation would return home without a deal.

On April 13, the US Navy began blockading all maritime traffic entering and exiting Iranian ports on both sides of the Strait of Hormuz, which accounts for approximately 20 per cent of the world’s oil, petroleum products, and LNG supplies.

Washington maintains that non-Iranian vessels are free to transit the Strait of Hormuz as long as they do not pay Tehran a toll.

Iranian authorities have not announced the imposition of a toll, but have discussed such plans.