Iran-US Tensions Send Oil Prices Soaring

Oil prices are on track for their steepest weekly gain since mid-July, driven by rising tensions between the US and Iran. Brent crude futures have dropped slightly but remain up 6.5% for the week, while WTI has climbed 8.8%. The price increase comes amid heightened concerns over Middle East supply risks due to ongoing hostilities between the two countries.

The conflict began in late February with US-Israeli strikes and has since intensified, with Israeli Defence Minister Israel Katz renewing warnings that Israel would 'cripple' Iran's military and civilian infrastructure. A US campaign to throttle Iran's economy by blockading its oil exports and stopping sanctions evasion is growing increasingly difficult for the country to withstand.

Analysts turned more bullish on prices as concerns grew over the Strait of Hormuz, a key chokepoint that handled about one-fifth of global oil supplies before the conflict began. Citi raised its average Brent crude price forecast for the third quarter to $86 a barrel from $80, citing delays in the reopening of the strait.