Middle East Tensions Send Oil Prices Soaring to Four-Week High

Oil prices surged on Wednesday and settled at their highest in nearly four weeks due to escalating tensions in the Middle East. Brent crude futures rose by 60 cents, or 0.7 percent, to settle at US$91.62 a barrel, while US West Texas Intermediate crude futures increased by 89 cents, or 1.1 percent, to close at US$85.83 a barrel.

The increase in oil prices is largely attributed to the UAE's decision to suspend all financial and economic transactions with Iran following recent missile attacks. This move has heightened geopolitical tensions in the region, leading investors to price in a higher risk premium for crude futures.

Brent's rise above US$91 a barrel suggests that traders are factoring in a higher risk premium, potentially leading to prices returning to three-digit levels, according to Ahmad Assiri, research strategist at brokerage Pepperstone.