Danske Bank analysts stress that tensions in the Middle East and disruptions around the Strait of Hormuz are keeping Oil markets on edge. Brent has risen to 111 USD/bbl as traders assess risks to global energy supply. The bank expects constrained traffic through the Strait of Hormuz to persist, supporting higher energy prices and feeding into inflation forecasts.

Brent reflects Hormuz supply disruption risk

"Focus continues to be on tensions in the Middle East, keeping oil markets and risk sentiment on edge."

"At the time of writing, Brent crude prices have risen to 111 USD/bbl as markets assess the risks to global energy supply."

"Compared to our previous forecast, the inflation path has been revised upwards, reflecting our view that traffic through the Strait of Hormuz will remain subdued for an extended period, exerting pressure on supply chains."

"The underlying assumption remains that a ceasefire and/or broader stabilization would imply a partial (if not full) reopening of the Strait of Hormuz, easing constraints on global energy supply."

"This view is increasingly supported by a pick-up in bilateral agreements, particularly between Asian economies and Iran, allowing some oil flows to resume via alternative arrangements."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)