Global oil markets breathed a sigh of relief on Wednesday, as crude prices reversed a previous jump caused by the increasing Israel-Iran tension. Brent crude, which had risen above $75 per barrel, slipped back to around $69 as traders responded to news confirming no damage to vital oil infrastructure in the Middle East.
The Strait of Hormuz, a crucial chokepoint through which approximately 20% of the global oil supply passes, remains open and operating. Despite increasing regional tensions, military analysts noted that neither Iran nor Israel had targeted oil terminals or shipping lanes, which has helped to calm markets. Maritime activity in the Persian Gulf has continued, but with tightened security measures.
Despite the reprieve, analysts caution that the situation remains fragile, and any direct hit on Gulf oil fields or refineries may send prices rising again. Goldman Sachs energy analysts emphasised that “a single missile strike on a major facility could change the entire outlook overnight,” advocating cautious optimism among investors and policymakers.
Oil-producing nations, particularly Saudi Arabia and the UAE, have vowed to maintain predictable supply flows and are working closely with the International Energy Agency (IEA). As the issue approaches a critical stage, investors will be looking for signals of escalation that could revive worries of an energy catastrophe.
