Oil price ‘not in the clear yet’ amid Iran-Israel ceasefire - Bureau for Economic Research
Oil prices fell when news of the de-escalation broke.
Shipping, oil tanker, attacks, 123rf.com
John Maytham (in for Lester Kiewit on CapeTalk) speaks with Tracey-Lee Solomon, an economist at the Bureau for Economic Research.
Listen below:
After the US bombed key nuclear facilities, Iran retaliated by striking a US air base in Qatar.
It reportedly alerted Qatar about the incoming attack, which allowed the base to be evacuated and the airspace to be closed.
The choreographed nature of the retaliation led to a decrease in oil prices, with Brent crude immediately falling to $71.15 a barrel.
Global markets had initially been concerned that Iran would close the Strait of Hormuz, a shipping route that carries a fifth of the world’s oil and gas supplies.
This could have led to oil prices spiking as high as $120 a barrel.
“The last time that happened was around August 2022, and petrol was roughly R2/l higher than it is now.”
- Tracey-Lee Solomon, Economist - Bureau for Economic Research
While the announcement of a ceasefire is positive for oil prices, Solomon says we are not out of the woods just yet.
RELATED: Global oil prices in flux as the conflict between Israel and Iran intensifies
“I would be very cautious to say we are in the clear.”
- Tracey-Lee Solomon, Economist - Bureau for Economic Research
However, she says Iran does not seem willing to disrupt the Strait of Hormuz.
Scroll up to the audio player for more.