Geopolitical Risks Sustain Elevated Oil Prices

The market's upward trajectory stems from concerns about potential US military action against Iran, which threatens supply disruptions, particularly for Iranian exports and critical shipping routes. While banks anticipate any military response will be limited to avoid direct damage to oil infrastructure, other factors contribute to market tightness.

These include temporary supply outages in Kazakhstan, Russia, and Venezuela, alongside extreme winter weather in the United States and technical incidents affecting major fields. Venezuela's recent policy shifts and partial easing of US sanctions offer long-term potential for increased output and investment, though near-term gains are not certain.

Angel One's Neha Dubey reports that oil prices reflect a balance between these geopolitical risks and expectations of limited long-term supply disruption.