Teeuwe Mevissen, senior macro strategy specialist at Rabobank, notes that the price of Brent crude has risen as markets reassess the prospects for a peace deal amid the Iran war and the risk of disruptions in the Strait of Hormuz. Mevissen highlights Iran’s plans for a fresh maritime authority and toll system, and links oil moves to elevated U.S. Treasury yields and broader stagflation concerns.
Geopolitics and Hormuz risk underlie prices
“Since the beginning of the Iran war, the market has tended to view the likelihood of a peace agreement with a glass-half-full attitude.” “Once again, markets have found some comfort in encouraging comments from both the United States and Iran, even as both sides make clear that major points of contention remain on key issues.”
“This statement comes after reports this week that Iran is planning to create a new ‘Persian Gulf Strait Authority’ to exercise control over the maritime zone in the area, and that the country’s authorities are also discussing with Oman how to establish a permanent toll system.”
“Amid confusion over the degree of progress towards peace, Brent crude oil prices rose this morning, although they remain at the lower end of this week’s range.”
“While asset prices continue to be driven by speculation about the length of time the Strait of Hormuz may remain closed, economic data is increasingly reflecting the impact the supply shock is already having.”
“Given the stagflationary effects of the war, this will be a problem that many governments around the world will face.”
(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)
