(SeaPRwire) – By: Alisa Mercer
Oil prices can’t hold a steady trend right now. Every hint of progress on shipping routes gets crushed by a new attack. Traders are stuck jumping between optimism and fear. This isn’t normal market movement. It’s slow-burn supply chain attrition playing out across two major global chokepoints. Every new attack resets price expectations. No one can count on a steady flow of crude to end the volatility. I talked to three commodity trading desk heads last week. All said they’re pulling back on long positions. No one wants to get caught holding the bag when another attack hits.
Brent crude rose 0.5% to $83.98 a barrel on Monday. West Texas Intermediate gained 0.3% to hit $78.44. Both benchmarks had already jumped more than 5% over the prior three sessions. Prices pulled back from session highs after conflicting signals came out of the Hormuz talks. Iran says a shipping deal with Oman is very close. It also says the strait won’t reopen immediately. Iran still rules out direct talks with the U.S. for now. It demands an end to the U.S. naval blockade, removal of sanctions, and war damage compensation. On the same weekend, Houthi militants attacked Saudi Arabia’s Jazan refinery. One Abu Dhabi National Oil Co. tanker was targeted in Hormuz. ADNOC confirmed three tankers were attacked there last week. The only good news came from the Black Sea. Ukraine agreed not to target non-Russian tankers moving Kazakhstan’s crude. That takes 1.8 million barrels per day of exports off the risk table for now.
Every sustained period of volatile crude prices hits refiners first. Refiners buy crude at fluctuating prices and sell fuel with lagged price adjustments. Thin margins get wiped out in weeks if volatility spikes. Smaller independent refiners don’t have the hedging capacity to absorb this kind of swing. Shipping firms are also getting squeezed. Insurance rates for tankers transiting the Middle East and Black Sea have already tripled in a month. Those costs get passed down the line. Gas prices at the pump stay higher even when benchmarks dip. Consumers cut discretionary spending when energy costs stay unpredictable. That feeds into a slower economy, which pulls prices down temporarily. Then the next attack pushes prices back up. The cycle doesn’t break until one side gives in on core demands. Right now, neither Iran nor the U.S. is willing to compromise on key terms. Proxy attacks will keep coming. Any trader who bets on a quick end to volatility will lose money.
Author bio: Alisa Mercer, commodity risk desk lead with 12 years of experience tracking global energy supply chains.