Financier warns fuel prices could worsen over Strait of Hormuz situation
Financier Edmunds Krastiņš warns that fuel price stabilization is unlikely as long as the Strait of Hormuz situation remains unresolved, and says prices could rise further. The current price turmoil may not be the last, he says.
Speaking on TV24's program "Preses klubs," financier and former state property minister (1993–1994) and former finance minister (1999–2000) Edmunds Krastiņš discussed the outlook for fuel markets, linking it closely to developments in the Strait of Hormuz.
No stabilization in sight
Krastiņš said there is currently no basis to expect an improvement in the fuel market. In his view, prices will not move in a favorable direction until a resolution is found regarding the Strait of Hormuz — and there is a real possibility the situation could deteriorate further.
What is currently holding prices back
According to the financier, oil exchange prices are for now being largely held in check by uncertainty and expectations that the United States will manage to resolve the situation. Fuel reserves released onto the market by China and the US have also helped ease the price increase.
A worrying scenario
However, Krastiņš warned that the situation could escalate further — if roughly 20% of oil were to disappear from the global market, it could trigger a significantly sharper price rise. For this reason, he assessed that the current price turmoil should not be considered the last one.
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