Oil Prices Surge Amid Hormuz Tensions; Experts Fear Prolonged Conflict

Oil prices have climbed sharply to $87 a barrel amid heightened tensions between the U.S. and Iran, following new American strikes against Iranian targets. The conflict's escalation has experts concerned about a prolonged struggle, with Rystad Energy highlighting an increased risk of a stalemate.

Brent crude traded at $90.36 a barrel on Monday morning, a significant jump from around $72 at the start of the month. Thina Margrethe Saltvedt, chief analyst at Nordea, noted that recent developments have made a resolution more challenging. "We have taken a couple of steps back now," she told E24. "Especially the fact that military actions have resumed makes the work to establish an agreement pushed back in time."

Saltvedt finds it difficult to predict future developments in the Strait of Hormuz, emphasizing the volatile situation. "It is very difficult to estimate what happens next in Hormuz," she said. "Few would have predicted that Donald Trump would make a proposal on Monday and withdraw it already on Tuesday. The situation changes all the time."

The primary risk, according to Saltvedt, is the conflict escalating to directly impact oil infrastructure. "There is a risk that increased fighting could affect production, ports, ships, and refineries. This also increases the risk of more long-term damage, making it harder to reach a solution," she explained. While parties have incentives to find a resolution, negotiations are likely to become more complex, extending beyond control of the Strait of Hormuz.

Rystad Energy's analysis suggests a limited agreement remains the most probable outcome, but acknowledges a heightened risk of a stalemate or further extensive hostilities. The firm points out that the U.S. aims to lower oil prices and achieve a diplomatic breakthrough before the November midterm elections, while Iran seeks economic benefits through access to frozen assets, sanctions relief, and increased oil export opportunities. However, Rystad believes critical issues, particularly Iran's nuclear program and control over commercial shipping in the Strait of Hormuz, remain unresolved.

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Nå har man gått et par steg tilbake. Særlig det at man har begynt med militære aksjoner igjen gjør at arbeidet med å få på plass en avtale blir skjøvet ut i tid.