Oil remained in the green zone on Tuesday (February 10th), as the market refused to abandon the Middle East risk premium. As of 13:07 GMT (20:07 WIB), Brent rose +0.4% to $69.32/barrel, while WTI rose +0.2% to $64.51/barrel.

The primary fuel source remains the same: the Strait of Hormuz. US maritime authorities have issued guidance for US-flagged vessels passing through to stay as far away from Iranian territorial waters as possible and to verbally refuse any requests for boarding from Iranian authorities. Although only "guidance," the market interpreted it as a risk signal as Hormuz is a crucial waterway through which approximately one fifth of global oil consumption passes.

At the same time, the Oman-mediated US - Iran nuclear talks have been positive, but market participants believe the uncertainty of escalation is still sufficient to maintain a small risk premium. Analysts even believe that, without any real signs of supply disruption, prices are potentially vulnerable to further declines but for now, "tension" remains a hedge against corrections.

Additional spice comes from Europe : the European Union has proposed expanding sanctions on Russia, for the first time targeting ports in third countries (Georgia and Indonesia) that handle Russian oil. If this package goes ahead, logistics and maritime service lines could become even tighter and that typically makes energy markets even more sensitive.

There's also the demand story: Reuters reports that Indian Oil bought 6 million barrels from West Africa and the Middle East, as India shuns Russian oil amidst trade negotiations with Washington. This flow of purchases reinforces the impression that buyers are "securing supplies" as geopolitical headlines intensify. (arl) [sma]

Source : Newsmaker.id