Oil prices retreated after a five-session rebound as concerns about the geopolitical situation in the Middle East abated to some extent.
That’s what Daniel Takieddine, Co-founder and CEO of Sky Links Capital Group, said in a market analysis sent to Rigzone today, adding that “the announcement that the U.S. administration has put its latest move in the area on hold tempered immediate fears of supply disruption in an important oil producing region”.
Takieddine warned, however, that geopolitical risk has not disappeared.
“Tensions across major producing regions remain elevated, and developments in Eastern Europe and Latin America continue to inject uncertainty into energy supply chains,” he said in the analysis.
“In parallel, U.S. crude inventory data showed a strong increase in stockpiles, reinforcing the perception that physical inventory remains plentiful and that recent gains were running ahead of underlying demand conditions,” he added.
Looking ahead, Takieddine stated in the analysis that any renewed escalation in the Middle East or other producing regions would quickly push crude prices back to the upside.
“However, over the long term, the concerns over an oversupplied market remain a weight on prices and could pull oil toward new lows if geopolitical risks abate more consistently,” he said.
In a market comment sent to Rigzone on Thursday, Naeem Aslam, Chief Analyst at Zaye Capital Markets, noted that “crude oil prices remain volatile as markets continuously reprice the geopolitical risk premium against underlying supply-demand fundamentals”.
“The latest price swings have largely been driven by shifting Middle East dynamics, including troop movements, Iran-related tension, and broader security posturing, which lifted risk premium earlier, while recent signs of de-escalation have triggered a pullback,” Aslam said in the comment.
“Meanwhile, recent economic data reinforced resilient consumption and steady housing activity, supporting the view that demand remains intact but not overheating enough to justify a sustained upside breakout,” he added.
“Today’s labor and regional manufacturing updates will be key near-term drivers, as softer prints could revive concerns over slowing industrial activity and weaken demand expectations, while stronger data may help stabilize prices – likely within a range – given that supply conditions continue to limit longer-term upside,” he continued.
Rigzone has contacted the White House and the Iranian Ministry of Foreign Affairs for comment on Takieddine and Aslam’s statements. At the time of writing, neither have responded to Rigzone.
In a Skandinaviska Enskilda Banken AB (SEB) report sent to Rigzone by the SEB team on Thursday, SEB Commodities Analyst Ole R. Hvalbye highlighted that Brent “eased back this morning, sliding from yesterday evening’s peak near $66.8 per barrel to around $64.4 per barrel”.
“Still, stepping back, the move remains strong: Brent is up roughly $4.5 per barrel (~7.5 percent) in just a week,” he added.
Hvalbye stated in the report that geopolitics continues to dominate price action and noted that “the elevated volatility we saw over the New Year is clearly still in play”.
“The pullback this morning looks more like repositioning and reassessment than a genuine shift in the broader narrative,” he pointed out.
In a J.P. Morgan research note sent to Rigzone by the company’s head of global commodities strategy, Natasha Kaneva, on Wednesday, J.P. Morgan analysts, including Kaneva, said “Brent at $65 is only about $3 overvalued compared to its estimated fair value of $62 for January, suggesting the market sees minimal probability of a worst-case scenario in which Iranian oil supply of 3.3 million barrels per day is disrupted”.
In this research note, J.P. Morgan projected that the Brent crude oil price will average $60 per barrel in the first quarter of 2026 and $58 per barrel overall in the year.
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