More than 100 days after the outbreak of the conflict, about 20% of global energy flows are still disrupted, in a scene described as one of the largest supply shocks in history.
Although the largest explosion has been avoided, oil prices are still hovering around $100 per barrel, while analysts warn that the continued disruption of navigation in the Strait of Hormuz for a long period may push prices to above $200 per barrel, threatening a global economic crisis.
Several countries resorted to releasing part of their strategic reserves, while exporters searched for alternative methods, and weak demand contributed to curbing prices. However, these reserves gradually began to decline.
The OECD warns that the economic impact of the crisis may continue until 2027, even if the conflict ends tomorrow.
On the other hand, according to “fx street”, futures contracts for West Texas Intermediate crude oil “WTI” on the New York Mercantile Exchange “NYMEX” fell by 1.8%, reaching about $88.10 during European trading, Tuesday, down by more than 6% from the highest level recorded on Monday, at about $93.50.
This decline came after a sharp decline in oil prices, on Monday, following Iran’s agreement to stop attacks on Israeli territory, following US President Donald Trump’s call on the two countries to stop mutual military operations.
US crude oil rose on Monday morning, with renewed fears of an expanding confrontation in the Middle East and the possibility of closing the Strait of Hormuz for a long period, which is a vital passage for about 20% of global energy supplies. Military operations between Israel and Iran also dashed hopes that a permanent agreement between Washington and Tehran would soon be reached.
During Tuesday’s European trading, oil prices continued to fall, after Trump expressed his confidence that the negotiations with Iran had entered their final stages, and that the Strait of Hormuz might be opened within two or three days if an agreement was reached with Tehran, according to what was reported by The Guardian newspaper.
Technically, West Texas Intermediate crude oil is trading near $88.10, while the short-term trend is still bearish, with the price remaining below the 20-day exponential moving average at $92.16.
The Relative Strength Index (RSI) is also located at 42.83 below the middle line on the daily chart, indicating continued negative pressure, despite the decline in immediate selling momentum.
On the upside, the $92.16 level represents the first major resistance, and a daily close above it will be necessary to ease the downward pressure and open the way for a rebound towards the highest level recorded on June 3 at $94.87.
On the downside, oil may be heading towards the lowest level recorded on April 17 at $78.88, if the decline continues below the lowest level recorded on May 29 at $85.42.
