Crude Prices Soar as US-Iran Hostilities Escalate

Renewed tensions between the US and Iran sent crude oil prices soaring on Monday, with October WTI crude oil (CLV26) closing up +2.36 (+2.83%) to a one-week high.

The price hike follows a series of attacks and counter-attacks in the Middle East, including US Central Command's targeting of Iranian rocket launchers preparing to send mines into the Strait of Hormuz, and Iran's retaliation by firing missiles and drones at US air bases in Jordan and the United Arab Emirates.

The International Energy Agency (IEA) has warned that the global oil supply deficit will worsen due to ongoing disruptions from the US-Iran war, with global oil inventories expected to fall in Q3 at twice the previously estimated rate.

Meanwhile, Russian crude production could be disrupted further after a Bloomberg News report said Russia is preparing to escalate attacks on Ukraine, which has intensified drone attacks on Russian oil infrastructure, curbing Russian crude production and exports.