Oil prices rose on 22 May amid investor uncertainty surrounding progress in peace negotiations between the US and Iran, although both Brent and US West Texas Intermediate (WTI) crude were set to conclude the week with declines.
By 08:45 GMT, Brent crude had risen by $3.3, or 3.2%, to $105.88 per barrel (bbl), while WTI futures had increased by $2.53, or 2.6%, to $98.88/bbl, reported Reuters.
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Over the week, Brent registered a fall of more than 3% and WTI dropped by approximately 6%, reflecting volatility in the market as expectations for a potential peace agreement shifted.
Negotiators remain divided on major issues including Tehran’s uranium reserves and governance of shipping through the Strait of Hormuz, despite some narrowing of differences.
The market response has been heavily influenced by news developments, as traders attempted to gauge the likelihood and timing of any deal.
Before the outbreak of the conflict, approximately one-fifth of the world’s energy supplies transited the strait, which facilitated exports from countries such as Saudi Arabia, Iraq, the United Arab Emirates (UAE) and Kuwait.
The ongoing conflict has taken roughly 14 million barrels per day (mbbl/d) off the market, around 14% of global supply.
ADNOC, the UAE’s state oil company, said full restoration of oil transit through the Strait of Hormuz would not happen until the first or second quarter of 2027, even if hostilities cease immediately.
In Asia, China may marginally increase its refined fuel exports in June compared to May, according to three trade sources cited by Reuters. Volumes are expected to remain at roughly 550,000t, with the country prioritising domestic demand.
Four sources told the news agency that seven top Opec+ oil producers could approve a moderate rise in July supply when they convene on 7 June, although oil deliveries for several members continue to be affected by the regional conflict.
