Middle East Tensions Send Oil Prices Soaring
Oil prices surged to multi-week highs on Tuesday as tensions in the Middle East escalated. Brent crude futures rose $1.25, or 1.3%, to $98.25 a barrel by 0630 GMT, while US West Texas Intermediate crude was at $93.70 a barrel, up $2.22, or 2.4%. These levels represent Brent's highest since July 24 and WTI's highest since June 8.
Suvro Sarkar, head of energy research at DBS Bank, noted that the recent uptick in hostilities between the US and Iran has the potential to 'materially change markets' reading of oil price related risks not only for the rest of 2026, but well into 2027 now.'
The rise in tensions is attributed to Iran's threat of 'economic warfare' against the US after the US struck three Iranian oil tankers on Saturday. Additionally, shipping traffic through the Strait of Hormuz slowed this week as Iran threatened retaliation for any new US attacks.