Rystad Energy more optimistic on Middle East diplomatic solution

• Flows in the Strait of Hormuz and Bab el-Mandeb are critical for oil and LNG price formation.
• Recent attacks on vessels have increased risk, causing oil prices to tick higher, but Rystad Energy is optimistic about a diplomatic solution between the US and Iran.
• A 'narrow deal' is expected by August/September, which would make current oil prices economically unsustainable and lead to a decline towards $70/barrel.
• Ukrainian attacks on Russian refining capacity are also contributing to high global diesel and gasoline prices.

Rystad Energy's Chief Economist Claudio Galimberti discusses the drivers of oil and LNG prices, emphasizing the importance of Middle East geopolitical stability. Despite recent escalations, Rystad expects a narrow diplomatic deal between the US and Iran by August/September, which should lead to declining oil prices towards $70/barrel.