Oil prices have been gripped by volatility since the U.S.-Iran war began nearly four weeks ago.
But analysts say the market has now entered a state of “backwardation” that suggests a risk premium has been baked into energy prices, despite traders anticipating a swift resolution to the conflict.
As investors reacted to reports on Wednesday that the White House had sent Iran a 15-point peace plan intended to bring an end to the conflict, oil prices fell sharply.
But mixed messages from Washington and Tehran on the state of peace negotiations, ongoing missile strikes in the Middle East and the continued backlog of traffic in the Strait of Hormuz ensured prices remain elevated.
Front-month global benchmark Brent crude futures are still hovering around the $99-a-barrel mark, almost 36% higher than where they stood before the U.S. and Israel’s first strikes on Iran on Feb. 28.
