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MUFG's Senior Currency Analyst Michael Wan highlights extreme volatility in Brent crude oil prices, which surged from $90 to $120 per barrel before retreating. This movement was driven by comments from former US President Donald Trump suggesting the Iran war could be ending soon, reducing geopolitical risk premiums. The sharp price swings reflect heightened sensitivity to Middle East tensions and their impact on global energy markets. This volatility is critical for traders and investors as Brent crude serves as a global benchmark for oil pricing. Geopolitical developments in the Gulf directly influence supply chain stability and investor sentiment, affecting not only energy markets but also equity indices and currency pairs tied to oil-exporting economies. Traders must monitor real-time news from the region and central bank responses to manage exposure. For Gulf investors, the unwinding of the Iran war premium signals a potential shift in market dynamics. While reduced tensions could ease oil prices, any renewed escalation remains a key risk. Investors should watch for updates on US-Iran negotiations, OPEC+ policy adjustments, and regional military movements. The interplay between geopolitical stability and energy demand will shape near-term price trends.
