Middle East Tensions Send Oil Prices Soaring

Oil prices rose on September 1 as tensions in the Middle East increased following the resumption of fighting between the US and Iran.

The conflict raised concerns about supply disruptions from key crude-producing regions, leading to a gain of around $1 in oil prices. Brent crude futures were up $1.05, or 1.2%, to $91.54 a barrel at 12:55 pm Singapore time, while US West Texas Intermediate crude was up $1.27, or 1.5%, to $87.03.

The previous session saw Brent close up 2.7% and WTI settle up 2.8%, with prices reaching their highest since August 25 and 21, respectively. Analysts pointed out that the resumption of fighting brings back the potential for Iranian retaliation, which could damage energy infrastructure around the Gulf and add uncertainty to shipping through the Strait of Hormuz.

A tanker reported being struck by three projectiles while sailing out of the Strait of Hormuz on September 1, although no casualties or environmental impact were reported. Despite efforts by mediators to reopen the Strait, which carried about a fifth of global oil supplies before the war erupted in late February, progress has been slow.