Brent crude futures (OIL) are pulling back today to around $101 per barrel, signaling growing market hopes for a gradual de-escalation of the conflict between Israel, the US, and Iran. It appears that the frequency of attacks from both sides may begin to decline, which the market could interpret as a potential opening for a ceasefire from Tehran. Comments from Israeli sources suggest that Iran may already be engaged in talks aimed at ending the war. While these reports cannot be independently verified, investors seem to assign a low probability to Iran continuing the conflict once Israel and the US halt their attacks.
- According to Bloomberg estimates, it would take around two months of a full closure of the Strait of Hormuz to cause severe global economic disruption. Markets still see reasons to believe that the passage could be reopened sooner.
- The Persian Gulf accounts for roughly 20% of the global oil and gas market, with around 20% of that supply flowing to developed economies. Most Asian countries, which rely heavily on imports, maintain reserves covering several months or have access to Russian oil and gas. Europe appears to be the most exposed region.
OIL (H1 timeframe)
Oil prices are gradually cooling, and when comparing recent price increases with RSI, a potential bearish divergence can be observed. If prices fall below $100, the first key support level is seen around $96 per barrel (based on prior price reactions).
Source: xStation5
Estimates from the ISW think tank point to a depletion of Iran’s missile capabilities. According to comments from the US military, Iran’s naval and air force potential, as well as much of its industrial base, has been significantly degraded following nearly 20,000 strikes on various targets across the country by the US and Israel. This may reduce Iran’s willingness to continue the conflict.
Source: ISW
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