Middle East Conflict Drives Oil Prices to $120 Predicted Peak

Oil prices have surged in recent days due to escalating tensions in the Middle East. The conflict between the US and Iran has effectively closed the Strait of Hormuz, constraining oil supplies from the region. This strategic waterway carries about a fifth of global oil exports.

The disruption has led to a sharp increase in oil prices, with Brent crude futures trading at around $93.60 per barrel and West Texas Intermediate at $91.62 as of Friday's GMT. Barclays analysts warn that the situation could worsen, predicting Brent could test $120 a barrel if the conflict persists for another couple of weeks.

The bank notes that fundamentals are stronger and risks bigger than during the Russia-Ukraine conflict when oil prices reached similar levels. They also point out that production shut-ins in Iraq and Kuwait have already begun and may spread to UAE and Saudi Arabia over time.