Written by: Basant El-Farmawy
Oil prices fell during Monday's trading, affected by the United States' decision to ease some sanctions and duties imposed on Russia, which raised expectations of additional fuel supplies entering global markets. Conversely, geopolitical fears remained due to ongoing security threats in the Middle East and uncertainty regarding negotiations between Washington and Tehran.
Crude oil price decline and supply movement
Brent crude recorded a drop to $108.3 per barrel, while US West Texas Intermediate crude also declined. This decline came after the signing of an executive order granting an exemption from major sanctions associated with previous legislation, following discussions held regarding fuel supply. In contrast, international parties expressed their observations and criticisms of this step, while official authorities continue to assess the economic repercussions of these exemptions on global markets.
Middle East risks and shipping pressures
On the other hand, markets faced continuous pressure due to Middle East tensions that directly affected the security of shipping routes and the availability of energy supplies. Oil flows through the Gulf have seen a noticeable decline amid reports of security incidents involving commercial vessels in the region, alongside continued fears of a widening regional confrontation and potential threats. Markets remain expectant of upcoming US inventory data and developments in vital waterways such as the Strait of Hormuz, which could play a decisive role in determining future price trends amidst a state of volatility and continued divergence in analysts' estimates of supply and demand levels.
