Crude Rallies 3% Amid Middle East Tensions and OPEC Shift

Key Details Brent crude surged 3% to $114.70 per barrel on April 29 as geopolitical uncertainty continued to impact energy markets. U.S. benchmark crude gained 3.4% to $103.32 a barrel. The price moves came as investors monitored developments in the Iran conflict and assessed the impact of the UAE's decision to exit OPEC effective May 1. Why It Matters The UAE exit signals growing producer frustration with OPEC output quotas that have constrained production below potential levels. However, analysts say near-term oil prices will depend primarily on reopening the Strait of Hormuz, through which roughly one-fifth of global oil flowed before the conflict. Currently, the waterway remains largely closed, limiting supply flows. Market Context The Federal Reserve held its key interest rate at 3.6%, supporting expectations that borrowing costs will remain elevated to combat inflation. Asian markets showed mixed performance, with Hong Kong's Hang Seng gaining 1.7% and Seoul's Kospi rising 0.8%, while European indices slipped. Wall Street posted overnight losses, with S&P 500 and Dow futures barely changed.