Middle East Tensions Send Crude Oil Prices Soaring to One-Week High
Crude oil prices surged to a one-week high on Monday as tensions in the Middle East escalated following renewed US-Iran hostilities. The October WTI crude oil price (CLV26) rose by 2.83% to close at +$2.36, while the October RBOB gasoline price (RBV26) increased by 0.88%.
The conflict began on Monday when the US Central Command targeted Iranian rocket launchers preparing to send mines into the Strait of Hormuz. Iran retaliated with missile and drone attacks on US air bases in Jordan and the UAE, further fueling concerns about military escalation and reduced global energy supplies.
Goldman Sachs reported that oil exports from the Persian Gulf have risen to 15-16 million bpd, approximately two-thirds of pre-war levels. This increase is likely due to the US naval blockade on Iranian ports, which President Trump stated has put pressure on the country. The Energy Secretary Chris Wright also mentioned that the US is playing a long game with Iran, implying no plans to de-escalate the conflict.
The International Energy Agency (IEA) predicted in its monthly report that the global oil supply deficit will worsen despite decreased demand due to war and high prices. Global oil inventories are expected to fall at twice the previously estimated rate in Q3 due to ongoing disruptions from the US-Iran war.