On Monday, October 27, Brent oil price reached $108.655 per barrel, showing a decrease compared to the previous trading day. U.S. crude oil was also recorded at $101.137 per barrel in the examined trading index. After Brent reached a five-month high, the market faced selling pressure and concerns over increased supply; however, shipping risks in the Middle East prevent a definitive continuation of price decline.
Factors Influencing Oil Prices
The oil trajectory on Tuesday, October 28, depends on two factors: the extent of reduced supply concerns and the intensity of the market's reaction to new regional developments. In the calculation of the equivalent in tomans, the rate of each dollar is considered to be 263,400 tomans and each euro 294,330 tomans.
Read more: Debate Over Oil Feed Rate; National Interests or Investment Security
After Brent reached the $110 per barrel range, the market found itself in a position where even positive news about supply could encourage traders to sell some of their long positions. A price decrease does not necessarily mean that fundamental market concerns have been resolved and may result from profit-taking and adjustment of expectations.
Geopolitical Developments and Their Impact on the Market
The Strait of Hormuz, as one of the crucial chokepoints in global energy trade, could significantly impact prices with the increased risk of maritime incidents or disruptions in shipping. Transportation companies and buyers may pay more to secure alternative shipments, and this increase in costs could put upward pressure on reference prices.
Reports regarding tanker incidents in the Strait of Hormuz have also added to market concerns. However, it should be noted that the occurrence of an incident, limited disruption in vessel traffic, and operational closure of routes do not have the same effect on supply. The impact of these situations on the market will differ in the short and long term.
Ultimately, Brent oil, as an important benchmark for pricing a large portion of oil traded in the international market, requires close monitoring of existing developments in light of supply and demand conditions. Therefore, the daily change in Brent alongside the behavior of WTI contracts holds greater significance.
Read more: Delivery of a Large Oil Shipment from an Iranian Tanker to Europe · Severe Decline in Oil Revenues of Gulf Countries Due to the Strait of Hormuz Crisis
