
Oil markets are currently navigating a high-stakes transition period following a ceasefire that reduced the initial risk premium established in March. While prices have stabilized between $95 and $105 per barrel, the market remains binary; failure to finalize the pending memorandum could trigger re-escalation and price spikes, particularly in the East and for refined products in the West. Jerome Dortmans, co-head of global oil and products trading at Goldman Sachs, notes that while demand destruction is evident in Asia, developed economies remain resilient. Strategic reserves and refinery optimization are currently mitigating supply shortages, though potential bottlenecks in jet fuel and diesel persist. A lasting peace deal would likely lead to a gradual normalization of supply over six to nine months, shifting the market from a directional focus to relative value trading as producers begin hedging against potential downside risks.
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