Hormuz Tensions Push Oil Prices to Record Highs
The oil market has become increasingly volatile as tensions between the US and Iran escalate, putting one of the world's most critical energy corridors at risk. The Strait of Hormuz, which handles a significant share of global energy trade, is now a focal point for traders who are demanding a higher risk premium due to concerns over shipping safety.
WTI crude prices rose more than 2% during Asian trading, with the price breaching $90 a barrel after reports that an oil tanker was hit by naval mines in the strait. However, experts believe that the path towards $100 oil is not automatic and would require a significant disruption to physical supplies.
Analysts predict that WTI could test the $85 area as it consolidates above this level while geopolitical tensions persist and shipping through the Strait of Hormuz becomes increasingly constrained. A breakout above the $85.80-$85.90 range could pave the way for prices towards $87.69 and higher levels.