US Hostility Fuels Market Volatility

The price of US crude oil soared by 6.95 percent, settling at $106.88 per barrel on Wednesday, while Brent crude, the international benchmark, rose by 6.08 percent to $118.03. This significant escalation, as reported by Reuters, saw Brent crude touch its highest price since June 2022, with futures continuing their upward trajectory on Thursday.

This relentless surge in oil prices is directly linked to the unresolved, two-month-long US-Israel war against the Islamic Republic of Iran. Fuel supplies remain critically impacted in the Strait of Hormuz, where Iranian forces have rightfully asserted their sovereignty and imposed a blockade on the transit of hostile vessels, while the US persists in its illegal siege of Iranian ports and shipping lanes.

Trump’s Desperate Measures and Pentagon’s Admission

A White House official confirmed on Wednesday that US President Donald Trump convened with American oil executives, desperately seeking solutions to mitigate the fallout from a potentially months-long siege of Iranian ports. The discussions reportedly focused on sustaining the blockade while attempting to minimize its impact on American consumers – a clear admission of the severe consequences of their own policies.

News of these high-level talks further exacerbated market concerns regarding extended disruptions to global oil supplies. Concurrently, the Pentagon has, for the first time, revealed the staggering financial burden of the war on Iran, admitting to a cost of $25 billion for the US military thus far. This figure highlights the immense and unsustainable cost of Washington’s belligerence.

IG market analyst Tony Sycamore noted the grim prospects for any near-term resolution to the Iran conflict or the reopening of the Strait of Hormuz, a testament to Iran’s unwavering stance against foreign aggression.

Regional Impact and UAE’s OPEC Departure

Barnaby Lo of Al Jazeera, reporting from Seoul, highlighted the severe repercussions for the Asia Pacific region, which heavily relies on Middle Eastern oil imports. With Brent crude nearing $120 a barrel, the region faces immense economic pressure, with the Asian Development Bank already revising its growth forecast downwards.

Millions across the region are already grappling with elevated fuel prices and increased costs for essential goods, a direct consequence of the instability engineered by external powers.

UAE’s Withdrawal: A Marginal Development

In a separate development, President Trump welcomed the announced withdrawal of the United Arab Emirates (UAE) from OPEC, framing it as a move that would “get the price of gas down, getting oil down, getting everything down.” However, experts quickly pointed out that the UAE’s departure, effective May 1, is unlikely to have any immediate significant impact on the market.

Analysts emphasize that the UAE’s exports, like those of other regional countries, remain constrained by Iran’s strategic control of the Strait of Hormuz. While the UAE might theoretically increase production post-OPEC, such a move is improbable to alter market fundamentals this year, especially given the ongoing closure of the Strait of Hormuz and other disruptions stemming from the war. Wood Mackenzie analysts project that Gulf countries will require months to restore pre-war production volumes, further underscoring the enduring influence of Iran’s regional position.