Geopolitical Uncertainty: Stable Oil Prices and Rising Gold—Implications for Investors and Businesses in Oman
Muscat: Oil prices exhibited stability on Monday, with crude trading at $68.60 and West Texas Intermediate (WTI) at $65.85. This balance comes amid the implementation of new European sanctions targeting Russian oil and concerns that rising tariffs may dampen fuel demand, despite increased output from OPEC producers.
The European Union’s 18th sanctions package aims to reduce Russia’s oil revenues by banning imports of petroleum products refined from Russian crude, even if processed in third countries, such as India. It also includes a dynamic price cap, according to Vijay Valecha, Chief Investment Officer at Century Financial.
Despite these measures, oil prices have not seen a significant decline, partly due to ongoing geopolitical tensions, altered trade routes, and market uncertainties—such as the U.S.-China trade discussions and supply disruptions caused by wildfires in Canada.
Adding to this complexity, U.S. President Donald Trump has threatened sanctions against Russian oil buyers and indicated potential new tariffs on the EU. The upcoming discussions regarding Iran’s nuclear program further cloud the supply outlook, creating a tension between bearish pressures from increased supply and demand concerns, and bullish risks arising from sanctions and other uncertainties.
Gold prices are up by approximately 0.55% today.
From a fundamental perspective, recent debates surrounding central bank independence and policy direction have spurred safe-haven buying last week. However, the momentum appears to be waning, even as tensions persist.
Gold prices in Oman:
- 24k: RO 42.500
- 22k: RO 39.750
- 18k: RO 31.400
Technically, gold is trading at the neckline of an ascending triangle formation, with prices between $3,364 and $3,374. A breakout above $3,374 would indicate a bullish trend, with targets rising towards $3,436. Conversely, a break below the supporting trendline, which connects the lows at $2,832 (February 28), $2,956 (April 7), $3,247 (June 30), $3,282 (July 9), and $3,309 (July 17), would signal a bearish trend. The nearest support levels are at $3,345, followed by $3,331.
Special Analysis by Omanet | Navigate Oman’s Market
The current stability in oil prices presents both opportunities and risks for businesses in Oman, particularly as new EU sanctions on Russian oil could reshape trade dynamics. Smart investors should closely monitor the balance between heightened supply and demand uncertainties, as potential geopolitical tensions and shifting trade routes may create volatility in energy markets. Entrepreneurs might consider diversifying their portfolios to hedge against these evolving risks while capitalizing on potential increases in alternative commodities like gold, which is showing bullish signals.
