Colombia | Oil: Amidst Conflicting Trends

Summary

Oil prices have experienced high volatility this year. Lower global demand and increased supply from OPEC+ have driven a bearish trend, which was recently interrupted by tensions between Israel and Iran. The outlook remains uncertain, especially concerning a potential blockade of the Strait of Hormuz.

Key points

• Key points:
• Oil prices have fluctuated widely throughout the year, with highs above $80 per barrel at the beginning of the year and lows, a few weeks ago, near $60.
• Throughout the year, the trend has been bearish, attributed to a combination of lower global demand and increased supply, particularly from OPEC+.
• In recent weeks, volatility has increased due to the confrontation between Israel and Iran and the risk of escalation in the region. This caused a sudden price increase that has moderated in recent days.
• The main risk centers on the possibility of Iran closing the Strait of Hormuz, through which about 20% to 25% of the world's oil and gas (transported by sea) passes. This could lead to prices much higher than those observed so far.

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