Oil Prices Surge as Middle East Attacks Continue and Diplomacy Stumbles
Oil prices initially jumped by over 3% in early Asian trade on Monday as fears of a major and extended supply disruption were stoked by continued attacks in the Middle East and the postponement of a crunch meeting between Gulf states and Iran. At the time of writing, both benchmarks had fallen back
Source: OilPrice.com
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DW NOTE
WTI at $103 is not a surge — it's 11% below the one-year high and a modest bounce within a seven-month supply crisis that has already cut world output by 6%. The Strait of Hormuz has been effectively closed since February, saw only 6 transits last week versus the usual 85 per day, and prices still haven't cleared triple digits on a sustained basis. Either the market doesn't believe the blockade will last or it has already priced in a permanent 6% supply loss. Neither interpretation suggests a functioning price discovery mechanism.