European Financial Institutions Predict Short-Term Stability in Oil Prices Amid Middle East Tensions

Several European financial institutions released reports on the 8th, forecasting that international oil prices are unlikely to return to pre-conflict levels between the U.S., Israel, and Iran in the short term. According to Odaily, the market should focus on the passage through the Strait of Hormuz and the restoration of infrastructure in the Middle East region. ING Group noted that the news of a two-week ceasefire agreement between the U.S. and Iran has somewhat alleviated concerns about long-term disruptions in oil supply, causing international oil prices to fall below $100 per barrel. The future trajectory of oil prices will depend on whether a lasting agreement can be reached in negotiations and if shipping levels through the strait can return to normal. It is expected that the market will continue to experience volatility during the negotiation period. UBS Group stated that it remains unclear when and to what extent shipping through the strait will resume, as some tankers will need time to re-route. If passage through the strait is blocked again, energy prices could quickly rebound. Additionally, even under optimistic scenarios, the repair of energy infrastructure and the resumption of production could take weeks or even months. Therefore, energy prices are unlikely to fall back to pre-conflict levels in the short term.