Global oil markets witnessed fresh volatility as the United States signaled a possible move to ease Iran oil sanctions, triggering a decline in crude prices. The development comes amid the ongoing Iran–Israel conflict and the escalating Strait Hormuz crisis, which has disrupted global oil supply flows.
Benchmark Brent crude fell around 2% to near $106 per barrel, while U.S. crude dropped over 1.5% to approximately $94.64. The decline followed remarks by Scott Bessent, who indicated that Washington may release a significant volume of sanctioned Iranian crude currently held on tankers.
Iran Oil Sanctions Relief Aims to Cool Prices
Bessent suggested that nearly 140 million barrels of Iranian oil stored at sea could be brought back into global markets in the coming days. Analysts believe that easing Iran oil sanctions could provide short-term relief to oil price volatility, especially as supply disruptions intensify due to the Strait Hormuz crisis.
Experts note that such a move would act as a temporary buffer, helping to stabilize markets over the next two weeks. However, they caution that structural supply risks remain due to ongoing geopolitical tensions.
Strait of Hormuz Crisis Drives Market Uncertainty
The Strait Hormuz crisis has emerged as a critical factor influencing global oil supply. The strategic waterway, which typically handles a significant portion of the world’s oil shipments, has faced disruptions following Iran’s actions in response to recent military developments.
Benjamin Netanyahu indicated that Israel is supporting efforts to reopen the Strait of Hormuz, highlighting international attempts to restore normal shipping operations. Analysts emphasize that reopening the strait is essential for stabilizing oil markets and preventing further price spikes.
Brent Crude Forecast Points to Further Volatility
Financial institutions have revised their Brent crude forecast in response to the escalating crisis. Citigroup has raised its near-term outlook, predicting that prices could reach $120 per barrel within one to three months.
In a more extreme scenario, analysts suggest that Brent crude could surge to $150 per barrel if disruptions persist. At the same time, a de-escalation scenario could see prices retreat to the $70–$80 range by the end of the year, reflecting the high degree of uncertainty in current market conditions.
Global Oil Supply Faces Rising Risks
The ongoing conflict and attacks on energy infrastructure have significantly increased risks to global oil supply. Analysts highlight that disruptions in key production and transit regions could lead to sustained oil price volatility, affecting economies worldwide.
Reports indicate that some industry experts believe prices could climb even higher, potentially exceeding $180 per barrel if the crisis continues through the coming weeks. This scenario underscores the fragile balance between supply and demand in the current environment.
Market Dynamics Reflect Elevated Freight Costs
In addition to supply disruptions, elevated freight costs and shifting demand patterns have widened price differentials between global benchmarks. Increased demand for inland U.S. crude and logistical challenges have contributed to changes in market dynamics.
Experts suggest that these factors, combined with geopolitical tensions, are likely to keep oil markets highly reactive in the near term.