Middle East Conflict Sends Oil Prices Soaring Above $90

Oil prices have been on the rise as tensions in the Middle East escalate. The ongoing military conflict has pushed oil above $90 a barrel, and some analysts predict it may reach $100 a barrel if no peace deal is reached between the US and Iran.

The 60-day ceasefire agreement between the two countries expired this week, and Washington shows no intention of extending it. Tehran has threatened to escalate the conflict, further increasing tensions in the region.

According to Alex Kuptsikevich, chief market analyst at FxPro, 'the market is gradually coming to terms with the idea that supply disruptions are not a temporary shock, but a new reality.' He notes that Brent crude futures have surged towards $92 per barrel and the US dollar index has risen.

Naeem Aslam, chief investment officer at Zaye Capital Markets, agrees that geopolitical supply premium is driving oil prices higher. He says that progress toward reopening the Strait of Hormuz has stalled, tanker movements remain constrained, and uncertainty around US-Iran relations has increased the probability of prolonged disruption of Gulf exports.

The wider oil ecosystem remains conflicted as supply risk collides with softer global demand expectations. International supply estimates point to a meaningful reduction in available crude as Gulf production remains disrupted, while producer-group projections show modest demand growth.