OIL was on track to close out its third week of gains as traders awaited President Trump’s decision on whether the US will directly intervene in the Israel-Iran conflict.
West Texas Intermediate futures traded just below $75 per barrel, and Brent crude, the international benchmark, hovered near $76.
Oil futures were on pace to close up roughly 3 per cent for the week, extending gains sparked by last Friday’s outbreak of hostilities between Israel and Iran.
Prices dipped slightly during early trading yesterday as hopes for a diplomatic resolution grew after Trump indicated he would give diplomacy a chance before deciding on potential US involvement in the conflict.
Despite the rally, Wall Street analysts remain cautious. Yesterday, Citi said its research team sees a “lower risk of material energy flow disruptions from the conflict.”
“Disrupting oil supply isn’t in the interest of either Iran or the US,” Citi analyst Spiro Dounis and his team wrote.
“If Iran’s 1.1 million barrels per day of oil exports were halted ... Brent prices would only rise to around $75–78 per barrel – offering limited upside from current levels,” he added.
Goldman Sachs has projected that if the conflict escalated and Iran’s oil supply were disrupted, prices could spike as high as $90 per barrel but decline back to the $60s in 2026 as Iran’s supply recovers.
On Wednesday, analysts noted that exports from Iran –and shipments through the Strait of Hormuz, a critical chokepoint for global oil – remain unaffected.
Wall Street also sees spare capacity from the Organisation of Petroleum Exporting Countries and its allies (Opec+) as a key buffer against supply shocks.
“While the exact magnitude is uncertain, we believe that above-average global spare capacity (worth around 4–5pc of global demand), is the main cushion against Iran-specific disruptions, enabled by deeper-than-expected unwinding of Opec+ production cuts,” wrote Goldman analyst Daan Struyven and his team.
Opec+ had already ramped up production in the months leading up to the Israel-Iran conflict.
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