Over the past two weeks, the oil markets have witnessed a notable resurgence, driven by factors bolstering investor confidence. The main driving force behind this phenomenon has been optimism surrounding a tighter supply in the oil market for this year and the prospect of an eventual interest rate cut in the United States.

On Monday, oil prices received an additional boost after the members of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) agreed to extend voluntary oil production cuts by 2.2 million barrels per day until the second quarter.

This decision, widely anticipated by the market, was met with enthusiasm as production cuts are expected to help stabilize the market amidst growing global economic concerns and increased production outside the group.

A notable announcement in this regard came from Russia, which pledged to reduce its oil production and exports by over 450,000 barrels per day during the second quarter, further in coordination with some OPEC+ participating countries.

This move surprised some analysts and has been perceived as a significant step towards rebalancing the oil market and restoring price stability.

The extension of production cuts and cooperation among major oil producers have fostered a confident atmosphere among investors, who view the prospect of more excellent stability in oil prices in the short term with optimism.

However, some concerns persist regarding the long-term effectiveness of these measures, given the ongoing uncertainty surrounding global energy demand and the evolution of the geopolitical situation in some key oil-producing regions.

Additionally, attacks on ships in the Red Sea carried out by Yemeni Houthis have added a new element of instability to the region while expressing solidarity with Palestine.

These provocative acts reached a critical point last week when the Houthis carried out the sinking of a ship for the first time, escalating tensions in an already volatile area.

Backed by Iran, Yemen’s Houthis have reaffirmed their determination to continue their actions against British ships in the Gulf of Aden in direct response to the sinking of the British-owned vessel Rubymar.

This escalation of hostilities raises further concerns about maritime security in one of the world’s most important trade routes, which could have significant repercussions on international trade and the global economy.