blueline

Nothing much has been updated, no news of further big-scaled conflict between Iran and other states that would prompt or signal an attack on Iranian nuclear or missile-related facilities. I will stand by my latest forecast numbers.

There are signs of normalized fluctuations in the price, below $90. It is very stable.

I was previously worried about the political interests and incentives to raise the oil price due to rising break-even prices of the Middle Eastern states, however since the war and instability are not impacting the oil prices steeply as Veronica mentioned, I decided to return to my original forecasting prices.

After consulting with Veronica, I understood her viewpoints of being pessimistic about the ceasefire: we have agreed that a long-term peaceful pact might not be possible without external interventions. 

However, a ceasefire lasting 30 days is a tricky question, as it sets specific longevity of time: 30 days of ceasefire might be strategically used in terms of regrouping and reforming the military for a bigger scale of war. Meanwhile, according to the sources, the new proposal by the United States includes a 6-week ceasefire. Whether this period would be agreed upon by both sides would remain to be a question. The rest of the proposal mostly covers the release of the hostages.

Now, as Israel and Hamas are talking about negotiating for a ceasefire, external pressure is also important, however, what matters most is the willingness of the direct parties. 

Currently, while the news has been somewhat optimistic that there has been progress made in the ceasefire talks, the specifics are unknown. An Israeli official says, there was "“some progress” but a breakthrough was not imminent"", Source  while "Hamas said today that Netanyahu “aborts all attempts” to make progress in negotiations." Source

Meanwhile, "Top Israeli officials have said if no agreement is reached the military will invade the city of Rafah on March 10, the start of Ramadan." Source 

Now, Israel has no intentions of ending the war, as it consistently stated it will "finish the job" in Gaza. Source However, they are willing to negotiate a ceasefire, which would mean their intentions are in the release and exchange of hostages. This does not mean that the exchange of hostages is the priority of Israel at this point: if agreement has not been reached, they will launch an attack on Rafah on March 10. After the war is escalated to Rafah, the chances of a long peaceful fact will be slimmed.

There are positives to the temporary ceasefire for Israel. It will be able to exchange hostages, and also reorganize military operations for possible future invasions. However, it is not in their best interests to be tied to this negotiation. If Hamas tries to push forward any agendas that conflict with Israel's interests, the deal will be off. Israel has a bigger picture in mind.

Therefore, I brought my percentage down to 70%. Should the ongoing negotiation fail by March 10, the chances for a peaceful pact lasting more than 30 days will fall steeply.

"The Biden administration on Thursday warned Iran of a "swift and severe" response from the international community if Tehran provided ballistic missiles to Russia", Source however the U.S. has stated that they will do so in the form of sanctions. Source 

Although there are still ongoing tensions between Iran and the U.S., (and the Western allies,) the responses are playing out in the form of non-military methods. As I have mentioned in my last forecast, they have also stated their intentions of not going on an all-out war, therefore I have deducted 1%.

The latest oil price was 83.67 Source

Although the oil price seems to be fluctuating normally, not showing any sign of sharp risings or declines,  the change in my forecasting was due to the break-even oil price projected by IMF, Source as we can see the break-even oil prices for most of the countries are projected to rise - therefore giving them more incentives to possibly increase the oil prices in the market to increase profits, which could potentially lead to a gradual increase in oil prices.

Israel and Hamas are picking up on their ceasefire talks. According to the source, both sides are "willing to give concessions". Source Moritz was right, talking to each other was a positive signal.

Other states including the U.S. and Arab states are putting in efforts to pursue the release of hostages accordingly. Source Meanwhile, the UN pointed out the human rights violations going on in the Israel-Hamas war. Source

However, Netanyahu is pushing for "indefinite military control" in Gaza, which could play out negatively. Source Some sources claim that Israel is preparing for prolonged conflict. Source Also, "Israel says it will attack the city if no truce agreement is reached soon." Source

Now, if an Israel-Hamas ceasefire were to happen, it would mean that there is a common ground (or condition) on which they agree.

(1) However, the Israel parliament and Netanyahu reject the idea of recognizing Palestine's statehood, Source 

(2) Meanwhile, the objective of Hamas is to "liberate Palestine and confront the Zionist project". Source

As two actors still do not see eye to eye on their objective, while a temporary truce might be achieved, it is questionable whether it would lead to a sustainable, peaceful consensus.

The most recent oil price closed at $81.86. As expected, there may be small turbulence in the price but it is becoming more unlikely that the oil price will rise to over $100 within such a short period, which last happened in August 2022. The conflict surrounding the Middle East and the ongoing War in Ukraine will cause the oil price to remain high around $80 compared to its relatively low price before 2022, however, unless further hostile interventions regarding the Middle East occur it is unlikely that the Oil price will rise above $90.

Iran said it "exchanged messages" with the United States. It is also said that Iran saw a political solution as the only way to end the Gaza war, and "Iran and Lebanon confirm that war is not the solution and that we never sought to expand it," Amirabdollahian told a news conference earlier on Saturday. Source 

Although Iranians call death to U.S., Israel on Islamic Revolution anniversary Source followed by missiles and burning of American flag, this was purely done by the people of Iran and not the Iranian government.

As Iran and the US seem to be talking to each other, and both are agreeing to not use war as a resolution: it is a positive signal between the US and Iran.

Israel is persistent in its pursuit of overtaking Rafah. Israel has promised a safe passageway for civilians: whether this promise will be kept or not, it reflects Israel's will to go through the plan accordingly. Israel also mentioned that to back down from Rafah means to lose the war for Israel. In response to this, "Hamas meanwhile said that an Israeli ground offensive in Rafah would mean the end of hostage negotiations." Source

"Earlier this week, Netanyahu called Hamas’ recent proposals for a ceasefire and hostage deal in Gaza “delusional.”", and although Biden will be talking with Israel upon pausing the war for humanitarian purposes, the past attempts have been unsuccessful. Source

However, providing a safe passageway for the civilians of Gaza will take quite a long time, which could provide some time for renegotiation for a ceasefire. Source

Egypt is also threatening to suspend a key peace treaty with Israel if Israel pushes into Rafah on its border. Source 

No key negotiation has been reached between Israel and Hamas, and Rafah seems to be an important fort of a peaceful negotiation. The current situation is slightly worse than before, with a lot at stake for both Israel and Hamas surrounding Rafah.

Since the last forecast, the US has retaliated against Iran and killed an Iran-backed militia officer in Iraq Source. As the US and Iran both do not want an all-out war, and due to this action of retaliation swirled hostility between Iran, Iraq, and the USA, all sides are likely to back down to prevent things from spreading to a scale that can't be turned back.