Oil Prices Surge Amid Middle East Tensions: What It Means for Investors and Businesses in Oman
LONDON: Oil prices inched higher on Thursday as investors assessed the growing risk of escalating tensions between the United States and Iran, sparking fears that any disruption to shipping routes or energy infrastructure could impact supply.
By 0853 GMT, Brent crude futures increased by 35 cents, or 0.5%, reaching $69.75 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose 37 cents, or 0.57%, to $65 per barrel.
Both benchmarks had gained approximately 1% on Wednesday, driven by geopolitical concerns that overshadowed a significant rise in U.S. crude inventories.
Market analysts highlighted that the potential disruption of about 20 million barrels per day of oil passing through the Strait of Hormuz underpinned prices despite the higher stockpiles. This critical waterway handles roughly one-fifth of global oil consumption.
Following discussions with Israeli Prime Minister Benjamin Netanyahu, U.S. President Donald Trump stated that no final agreement had been reached regarding Iran, but negotiations would continue. Earlier, Trump indicated he was considering deploying a second aircraft carrier to the Middle East if talks fail to yield a deal. The schedule for the next round of negotiations remains unconfirmed.
In related developments, the International Energy Agency (IEA) revised downward its forecast for global oil demand growth in 2026, attributing the adjustment to the impact of elevated prices on consumption.
U.S. crude inventories rose sharply by 8.5 million barrels to 428.8 million barrels last week, markedly surpassing expectations of a 793,000-barrel increase, according to data from the Energy Information Administration. Additionally, refinery utilization rates dropped 1.1 percentage points to 89.4%.
—Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The ongoing geopolitical tensions in the Strait of Hormuz, a critical global oil transit point, pose significant risks to Oman’s energy sector by potentially disrupting exports and supply chains. However, rising oil prices amid supply concerns also present a strategic opportunity for Omani businesses and investors to capitalize on heightened market volatility and increased revenues. Smart investors should monitor geopolitical developments closely and consider diversifying portfolios to balance risk while leveraging Oman’s pivotal position in global energy trade.
