Global Oil Prices Ease Amid Ongoing Tensions Between US and Iran

Global oil prices eased on Friday compared to the record levels reached on Thursday, yet remained highly elevated compared to their pre-war levels. Benchmark Brent Crude on Friday was hovering around the $111 per barrel mark, up 0.6 percent, while WTI Crude remained almost flat at $105 per barrel. Friday’s level of Brent is over $15 lower than Thursday, when it had peaked at $126 per barrel, the highest in the last four years. The ease in prices came despite United States President Donald Trump signalling resumed military action if diplomacy does not turn into favourable developments. He also said that Iran was eager to make a deal. On the other hand, Iran’s President Masoud Pezeshkian has described the US naval siege of Iranian ports as an “extension of military operations” and “intolerable.” Despite remaining lower than the previous day, crude prices are over 70 percent higher than pre-war levels and about 25 percent higher than what has been the cost of a barrel during the last few weeks. Traders are tracking developments in Washington and Tehran before taking a sigh of relief. To further add to the negative sentiment, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said it was unrealistic to expect quick outcomes from discussions with the US. According to experts, the United States’ pressure tactic of blocking Iranian ports has not borne the expected results, as Iran has faced harsh sanctions earlier. The US is preparing to ensure secure transit through the Strait of Hormuz in coalition with allied countries and shipping companies. Though the blockade of vessels that service Iran would continue, according to a report by international news agency AFP. Elevated oil prices have raised inflationary pressure on economies across the world, with the US Fed also concerned about the energy crisis and a downward trend in the global economy.