Oil Rises Despite Extension of the Middle East Ceasefire
Brent and WTI futures prices are climbing despite confirmation of an extended ceasefire between the United States and Iran, announced by Donald Trump.
The U.S. President stated that the position will be maintained "until Tehran presents a proposal and the talks conclude, regardless of their outcome."
The White House, however, upheld the decision to maintain the blockade of the Strait of Hormuz, meaning that limited throughput of the corridor will remain a major challenge for the global energy market in the near future.
Notably, the visit of U.S. Vice President J.D Vance's in Pakistan was also cancelled, citing significant differences in the vision of the agreement between Washington and Tehran.
"The longer these supply disruptions persist, the tighter the oil market becomes, meaning that after the end of wartime actions the path to market normalization will be longer," analysts at ING Think said.
"Restoring energy flows will take some time. The resumption of production will also take time," they added.
Source: Bloomberg.
John Authers, a Bloomberg columnist, believes the market is slowly beginning to adapt to mixed signals from the Middle East.
He also admitted that a shift in sentiment could occur if tensions between the conflict parties intensify and its dynamics change.
"Markets would truly not withstand an escalation of the conflict involving an American ground operation and Iranian attacks on energy infrastructure in the Persian Gulf. It would be a catastrophe," he said.
"That could only happen if Trump decides to do so, and he has threatened it several times already. However, the ceasefire has shown that he cares more about finding a way out of the situation," he added.
TACO, the style of Trump’s negotiations that involves applying pressure through threats and then withdrawing from radical actions, appears to be an integral part of financial markets in recent months.
"To confirm this thesis, after bad news about Vance’s trip cancellation, within 30 minutes Trump announced that the ceasefire would remain in effect indefinitely until Iran presents a new proposal," Authers noted.
Source: Bloomberg.
Read also: Suspicious transactions in the oil market. Insider traders earned billions. "A frightening example of market manipulation"
See also: Will the dollar return to 4 PLN? The land invasion of Iran remains a threat. Expert: "Unlikely, but still potentially possible"
Oil price and maximum fuel prices on Wednesday, April 22
The Brent futures price on Wednesday, April 22 is at 99,2 USD per barrel after a rise of 0,8%.
Chart. Brent futures price
Source: Trading Economics.
The WTI futures price rises by 0,9% to 90,4 USD per barrel.
Chart. WTI (West Texas Intermediate) futures price
Source: Trading Economics.
Maximum fuel prices in Poland, according to the Energy Minister’s announcement, are: 95 RON gasoline 5,95 PLN per liter, 98 RON gasoline 6,50 PLN per liter, diesel 6,75 PLN per liter.
Read also: Dollar and euro rates react to U.S. threats. Trump’s statement directly wakes up from the American dream.
See also: Fuel prices in Poland will rise, shortages at stations? Expert: "It will not be a one-time sharp move that affects drivers"
Sources: Truth Social, Bloomberg, ING Think, Ministry of Energy.
