Brent Reclaims $85 as Geopolitical Risks Rise

Key Moments

Brent Rises Above a Key Price Threshold

Deutsche Bank’s Early Morning Reid highlighted Brent crude oil trading around $85 per barrel, with prices modestly higher at $85.12/bbl. At that level, Brent was on track for its first close above $85 in more than a month, signaling a notable shift after a period below this psychologically and technically important level.

Middle East Tensions and Supply Route Risks

The note emphasized that recent price action has been closely tied to developments in the Middle East. According to the commentary,

“In terms of the latest in the Middle East, oil prices oscillated back and forth through the day, as strikes between the US and Iran continued.”

Additional geopolitical risk centered on crude transport routes. The report cited a media account, stating,

“Otherwise, there was also a Reuters report yesterday that Iran had asked its Houthi allies in Yemen to be ready to close the Red Sea oil route if the US struck Iran’s power network, which raised fears about further supply-chain disruption.”

Inflation and Rate Concerns Reemerge

The Early Morning Reid tied the latest move in Brent directly to the broader macro backdrop, particularly inflation dynamics and rate expectations. It noted that,

“And in the background, fears about rate hikes and more persistent inflation are still there, with Brent crude oil up another +1.06% this morning to $85.12/bbl.”

The report added that this latest leg higher in crude prices, alongside worries around the technology sector, has undermined the more constructive tone that followed the recent U.S. inflation data:

“That would be its first close above $85/bbl in over a month, and that combination of concerns around tech and inflation has really put a dent in the more buoyant narrative after the soft US CPI report earlier this week.”