Oil prices remained under pressure as the pause in military operations in the Middle East reduced the risk of immediate geopolitical escalation, said an industry expert. 

Hopes surrounding talks between Iran and Oman over shipping through the Strait of Hormuz improved market sentiment, raising expectations that maritime traffic conditions through the waterway could gradually stabilise and allow greater crude flows to reach international markets, remarked Konstantinos Chrysikos, the Head of Customer Relationship Management at Kudo, a leading financial platform. 

Despite the recent decline, downside risks for oil prices could remain limited, he stated. 

He pointed out that shipping disruptions continue in the Strait of Hormuz, constraining traffic and maintaining uncertainty over regional exports. 

At the same time, persistent security threats around the Bab El Mandeb Strait continue to pose risks to global supply chains, preserving a degree of geopolitical risk for crude prices, he said.

“Looking ahead, oil prices are likely to remain highly sensitive to geopolitical developments. Any further progress toward restoring normal shipping conditions through the Strait of Hormuz could weigh on prices as supply concerns ease,” noted Chrysikos.

Conversely, failure to reach a deal and any renewed military escalation could quickly lead to a rebound in crude prices,. he added.-TradeArabia News Service