Middle East Tensions Fuel Oil Price Surge

Global oil prices have risen amid escalating tensions in the Middle East, sparking concerns about disruptions to energy supplies. On August 18, Brent crude futures increased by 62 cents or 0.7% to $91.49 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 75 cents to $85.25 per barrel.

The rise in oil prices follows Iran's announcement that it would shift to a 'fully offensive military posture' as efforts to end the war have reached an impasse. The United States has ruled out extending the ceasefire agreement with Tehran, further exacerbating tensions between the two nations.

According to Tim Waterer, chief market analyst at KCM, oil prices are likely to remain volatile due to the precarious relations between the U.S. and Iran. Suvro Sarkar, head of energy research at DBS Bank, warns that the lack of an agreement will impact expectations for oil prices going forward, particularly in the fourth quarter and even in 2027.