By Sadiq Al Gobahi 
Summary: Oil markets have been highly volatile recently, with prices fluctuating due to geopolitical tensions, particularly between Israel and Iran, and concerns over global demand.
Expanded Version:
Background: The past week has been particularly tumultuous for oil markets, with prices experiencing significant fluctuations. The volatility has been driven by a combination of geopolitical tensions and concerns over global demand.
Geopolitical Tensions: Recent reports of an Iranian retaliation to Israel’s latest strike have pushed oil prices higher1. The markets are now anticipating an Iranian attack on Israel using drones from Iraqi territory, which has reintroduced a geopolitical risk premium1. This has caused Brent crude futures to rise to around $74-75 per barrel1.
Demand Concerns: Despite the rise in prices due to geopolitical risks, concerns over global demand are capping any significant gains1. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have admitted the possibility of rolling over its production cuts into 2025, citing concerns about soft oil demand, particularly from China1.
Market Reactions: The UK government’s decision to increase its windfall tax on oil and gas production in the North Sea from 35% to 38% has also impacted market sentiment1. Additionally, new sanctions imposed by the US on Russia’s Arctic LNG 2 project have added to the market’s uncertainty1.
Future Outlook: The long-term outlook for oil markets remains uncertain, with traders closely watching developments in the Middle East and OPEC+ decisions on production levels1. The upcoming US presidential election and the Federal Reserve’s policy meeting are also expected to influence market dynamics1.
Source: For more detailed information, you can read the full article here.
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