Middle East Tensions Fuel Oil Price Surge to Six-Week Highs
Oil prices have surged to fresh six-week highs as renewed tensions in the Middle East continue to drive up demand. The Brent crude futures contract rose $1.76, or 1.8 per cent, to $97.39 a barrel by 1025 GMT on Thursday, while U.S. West Texas Intermediate crude futures jumped $1.91, or 2.1 per cent, to $92.92.
The price hike comes after the latest round of US strikes against Iran and Israeli Defence Minister Israel Katz's warning that Israel would 'cripple' Iran's military and civilian infrastructure if Tehran launched attacks against it.
Saxo Bank analyst Ole Hansen attributed the surge in oil prices to Katz's comments, saying they had helped fuel the jump. Meanwhile, Iran has added more ships to its list of vessels deemed non-compliant, subjecting them to fines or detention if they try to pass through the Strait of Hormuz.
Global oil inventories remain low, with a 10-day average of around 13 vessels transiting the strait on Wednesday compared to six commodity vessels. This has contributed to higher prices as traders anticipate ongoing disruptions to supply.