Global crude oil prices recorded a slight increase on Monday. The situation in the Middle East and possible diplomatic developments kept investors cautious.
Brent crude closed at $105.28 a barrel after gaining 96 cents, or 0.9 percent. US West Texas Intermediate (WTI) also rose 19 cents to $92.60 a barrel.
The early stage of trading was more bullish. Prices rose more than $4, but later the hope of possible negotiations eased the market pressure somewhat.
The Strait of Hormuz is once again the focus of the energy market due to ongoing tensions in the Middle East. The world’s main oil supply passes through this route, so any major disruption here could have an immediate impact on global prices.
On the other hand, there have been some signs of improvement in oil supplies from the region. Increased exports from Saudi Arabia and the United Arab Emirates pushed total Middle East supplies to 12.8 million barrels per day in September. However, this level is still below pre-conflict levels.
It is not just crude oil that is under pressure in the market. Global diesel supplies have also been affected by various geopolitical disputes and trade restrictions. This situation has kept energy prices uncertain.
This global market trend is important for Pakistan because the country imports a large part of its petroleum needs. A continuous increase in external prices can increase import costs, while it can also affect local fuel prices. However, the final price in Pakistan is determined by exchange rates, taxes and other factors in addition to the global price.
The direction of the market currently depends on the supply situation and diplomatic efforts in the Middle East. A major development could cause a sharp move in prices, while there is also room for pressure to ease as deliveries return to normal.
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