Middle East Tensions Spark Oil Price Spike
Oil prices surged on Monday following a new escalation of tensions in the Middle East. The trigger for the price increase was the resumption of US attacks on Iranian territory after a hiatus of about one month.
Iran responded to the renewed hostilities with its own attacks on US targets in Jordan and the United Arab Emirates. As a result, the price of North Sea Brent crude for October delivery rose by over 1% to more than $90 per barrel.
The Strait of Hormuz remains largely closed, which is significant because it was previously used to transport about one-fifth of the world's oil and gas supply.
Market strategist Stephen Innes warned that shipping risks could quickly return to prominence in the commodities markets. He pointed out that peace efforts and negotiations have stalled.