Oil Prices Near $100 Amid Ongoing Conflict: What Investors and Businesses in Oman Need to Know
Hong Kong – Oil prices hovered near $100 per barrel on Monday as the conflict involving Iran entered its third week, with no signs of de-escalation from either side. Diplomatic efforts continued to ensure the safe passage of tankers through the strategically vital Strait of Hormuz.
Crude prices surged in early trading following a weekend announcement by the US president, stating that US forces had targeted military sites on Kharg Island, a key oil export hub in the Gulf. The president also warned that further strikes could extend to energy infrastructure if Iran disrupts transit through the Strait of Hormuz, which has been effectively closed since the US-Israel operations began on February 28.
Iran’s Fars news agency quickly responded, reporting that no oil infrastructure had been damaged in the strikes.
The US president called for international cooperation to secure the waterway but did not provide specific commitments from the US, instead expressing hope that countries such as China, France, Japan, South Korea, and the UK would participate. He emphasized this in a Truth Social post on Saturday, stating, “The Countries of the World that receive Oil through the Hormuz Strait must take care of that passage, and we will help — A LOT! This should have always been a team effort, and now it will be.”
However, Japan announced Monday that it was “not at the moment considering issuing a maritime security operation,” and Australia declared it would not deploy naval ships to the region.
The president indicated that Tehran desires a deal to end the conflict but said he was unwilling to agree to current terms, without elaborating further. Conversely, Iran’s Foreign Minister Abbas Araghchi rejected talks with Washington, stating in a CBS “Face The Nation” interview that there was no reason to negotiate given past American actions. Araghchi stressed, “We never asked for a ceasefire, and we have never asked even for negotiation.”
He did note, however, a willingness to engage with countries concerned about the safe passage of their vessels, adding that several nations had approached Iran on this matter.
Market hopes for a swift resolution were tempered by comments from Trump’s top economic adviser, Kevin Hassett, who said Pentagon estimates suggest the military operation could last up to six weeks, although it was currently ahead of schedule.
Both main crude benchmarks moved higher: Brent crude briefly surged about 3 percent to $106.50 before retreating, while West Texas Intermediate hovered around $99.
Amid growing fears of an energy crisis that could impact the global economy, equity markets experienced declines. Major Asian markets including Tokyo, Shanghai, Sydney, Seoul, Wellington, Manila, and Jakarta closed lower, while Hong Kong, Singapore, and Taipei saw modest gains.
Charu Chanana of Saxo Markets commented, “Equities may welcome any sign that Hormuz could be reopened, but with further strikes still being threatened and diplomacy still patchy, conviction is low.”
Adding to economic concerns, revised data showed US fourth-quarter GDP growth slowed to 0.7 percent from an initial 1.4 percent estimate. Additionally, the Federal Reserve’s preferred inflation measure fell to 2.8 percent in January before recent spikes in energy prices.
Ray Attrill of National Australia Bank noted, “Developments over the weekend, while no more disconcerting than at the end of last week, don’t offer any obvious pretext for a less pessimistic start to the new trading week.”
This week’s focus also includes policy meetings at seven major central banks, including the Federal Reserve, Bank of England, and European Central Bank. While interest rates are expected to remain steady, statements regarding the impact of the conflict on their economies will be closely monitored.
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The ongoing conflict around the Strait of Hormuz and rising oil prices near $100 per barrel underscore a critical risk for Omani businesses reliant on stable energy markets and supply chains. However, this volatility also presents opportunities for investors and entrepreneurs to capitalize on higher oil revenues and increased strategic importance of Oman’s maritime routes. Smart stakeholders should closely monitor geopolitical developments and diversify to mitigate potential disruptions while leveraging Oman’s geopolitical positioning.
