Oil prices hover around $110 amid Middle East tensions

Monday 06 - 09:45

Oil prices settled around $110 per barrel on Monday as markets remain tense over the Middle East conflict, where Donald Trump has threatened critical Iranian infrastructure, while potential negotiations are being monitored.

In Tokyo, one of the few exchanges open on this Easter Monday, the stock market saw slight gains.

Oil fluctuates amid Trump’s threats

At 07:30 GMT, the WTI for May delivery fell 0.57% to $110.90, while Brent for June delivery rose 0.46% to $109.53. Earlier, WTI climbed to $115.48 and Brent reached $111.89, nearing highs not seen since the U.S. and Israel began their offensive against Iran, approaching $120 per barrel.

Trump reiterated on Sunday that the U.S. could strike Iranian energy facilities and bridges if the Strait of Hormuz is not reopened by “Tuesday 8 PM” (Wednesday midnight GMT).

Lloyd Chan, analyst at MUFG Bank, commented: “While it remains to be seen if Trump’s belligerent rhetoric will materialize, the ongoing threats to critical Iranian infrastructure keep escalation risks high with no credible path to de-escalation.”

At the same time, Trump mentioned in U.S. media that there are “good chances” of reaching an agreement with Iran, without ruling out ground troops. According to Axios, U.S., Iran, and regional mediators are discussing a possible 45-day truce, which could lead to a permanent ceasefire, although prospects appear slim.

This news provided some relief to investors and moderated oil price fluctuations.

The Strait of Hormuz usually carries about 20% of global oil and natural gas production but has been nearly blocked since the conflict began. Supply disruptions have lasted over a month, causing a surge in gasoline and diesel prices in multiple countries, with U.S. retail prices nearing June 2022 records.

Stock markets show resilience

Many Asia-Pacific exchanges were closed due to Easter and the Chinese Qingming Festival. Tokyo’s Nikkei index rose 0.54% to 53,413.68 points, while the Topix index remained steady at 3,644.80 points. Seoul’s Kospi advanced 1.36%. Analysts noted that Japanese vessels passing through Hormuz eased some supply chain fears, and news of negotiations supported market confidence.

Gold gains, Dollar falls

At 07:30 GMT, the dollar dropped 0.2% to 159.36 yen, while gold rose 0.23% to $4,687 per ounce. Rising energy prices have prompted central banks to warn of returning inflation, suggesting possible interest rate hikes, which could pressure gold as a non-yielding safe-haven asset.