Oil prices slipped on April 1, even as tensions in the Middle East remained high and the Strait of Hormuz stayed largely shut. Brent Crude dropped nearly 5% to $98.65 a barrel, after briefly rising earlier in the day.
The fall came as investors chose to book profits amid uncertainty around how the situation in the region will unfold.
TRUMP SIGNALS POSSIBLE END TO CONFLICT
According to Reuters, US President Donald Trump said on Tuesday that the military campaign could end within the next two to three weeks, adding that Iran does not necessarily need to strike a deal for the conflict to conclude.
However, analysts caution that even if fighting stops, damage to key infrastructure may continue to restrict supplies. Trump has also suggested that the war could end before the Strait of Hormuz is reopened, a key route that handles about 20% of global oil and LNG trade, as reported by the Wall Street Journal.
SUPPLY WORRIES AND RISING FUEL PRICES
The effective closure of the Strait has already started to impact global markets. Reduced supply has pushed energy prices higher and raised fears of inflation.
In the US, petrol prices have crossed $4 per gallon for the first time since August 2022. This could add to economic pressure at a time when markets are already dealing with uncertainty.
While oil prices have dipped for now, the situation remains fragile, and any further developments in the region could quickly change the direction of the market.
