Middle East Tensions Send Oil Prices Soaring
Oil prices surged more than 3% on Wednesday as tensions in the Middle East escalated following US and Saudi strikes in Iraq. The strikes, which targeted Iran-backed groups responsible for drone attacks on Saudi oil facilities, came hours after the US military averted an Iranian attack on its troops in the region.
The Brent futures price rose $3.04, or 3.6%, to $87.13 a barrel by 08:24 GMT, while US West Texas Intermediate (WTI) crude gained $2.80, or 3.5%, to $82.06 a barrel.
UBS analyst Giovanni Staunovo attributed the price increase to 'renewed military strikes in the Middle East' and Iranian officials' reiteration that they want to control shipping activity through the Strait of Hormuz amid depressed oil flows through the Strait.
The US and Saudi Arabia's actions came as Tehran ruled out Oman's proposal for regional joint management of the Strait of Hormuz, a senior Iranian official told Reuters. This decision has further exacerbated tensions in the region, with only a few commodity ships transiting through the Strait so far this week.