📈 Global Oil Prices Surge Amid Fragile US-Iran Peace Talks

Global oil benchmarks rose nearly 1% on Tuesday as geopolitical tensions in the Middle East continue to threaten supply stability, impacting energy costs for importing nations like Sri Lanka. • Overall Figures: Brent Crude futures climbed 0.8% to US$ 105.07 per barrel. WTI crude increased 1.0% to US$ 99.06 per barrel. Both benchmarks saw a significant 2.8% gain on Monday. • Supply & Logistics: • Disagreements over the Strait of Hormuz remain critical; the passage handles ~20% of global oil and LNG flows. • OPEC output in April hit its lowest level in over 20 years due to export curtailments. • Saudi Aramco warned that continued disruptions could delay global market stability until 2027, with a weekly loss of 100 million barrels. • Market Outlook: • Analysts suggest Brent could spike to US$ 115+ if blockades escalate, while a peace breakthrough could trigger a US$ 8-12 correction. • Focus shifts to the upcoming US-China meeting following new sanctions on entities facilitating Iranian oil shipments. • Impact on Sri Lanka: Persistent high prices above US$ 100 per barrel exert pressure on Sri Lanka's forex reserves and energy costs, potentially affecting the transportation and manufacturing sectors.