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Tuesday, May 05, 2026

Oil prices ease but analysts warn supply risks could push crude above $120

تم إعداد هذا المنشور من قبل فيجاي فاليتشا

Oil prices ease but analysts warn supply risks...

Vijay Valecha, May 5, The National

Oil prices eased on Tuesday after gaining nearly 6 per cent a day earlier, but analysts warn the market remains vulnerable and any flare-up in the Strait of Hormuz could push crude above the critical $120 a barrel threshold.

Brent, the benchmark for two thirds of the world's oil, was trading 2.10 per cent lower at $112.04 a barrel at 4.20pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was down more than 3.22 per cent at $102.44 per barrel.

The pullback followed reports indicating that the US may be easing Iran’s blockade of the strait, raising hopes of renewed supply from the Middle East.

A fragile US-Iran ceasefire appeared to be holding on Tuesday morning, despite the previous day of clashes in the Strait of Hormuz and missile and drone attacks targeting the UAE. The UAE Foreign Ministry accused Iran of a “terrorist attack” on Monday, when Tehran launched a drone attack on a vessel affiliated with the Abu Dhabi National Oil Company while it crossed the Strait of Hormuz.

At least 13 vessels were forced to reroute and move away from the areas Iran has claimed in its control zone in the strait, meaning tension has risen sharply.

“The oil price bias remains bullish,” said Vijay Valecha, chief investment officer at Century Financial. He also warned reopening the vital route is unlikely to be smooth: “This won’t be a clean, linear path.”

However, some analysts argue the scale of the supply shock may be less severe than initially anticipated. Economists at Julius Baer are of the view that while oil storage levels are declining due to disrupted energy flows, the pace remains manageable.

“Crude oil and oil product prices are below the 2022 crisis peaks, which suggests concerns about the biggest fuel shock in history and an imminent crisis are not shared by markets,” they said.

The gas market, in particular, remains surprisingly immune, they added.The biggest risk for the global oil market is the “re-emergence of energy infrastructure” as a target, said Mr. Valecha.“Global stockpiles of oil and products are being drawn down at a pace because of the Iran war, with the biggest risks seen in naphtha, jet fuel and LPG [liquefied petroleum gas],” he said.Source

The National

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