Oil Prices Climb Amid US-Iran Conflict and Strait of Hormuz Tensions
Oil prices rose by around 1% on Wednesday due to the ongoing US-Iran conflict and its impact on Middle East supplies. The tension in the region has been a key driver of oil price movements in recent days, according to OANDA senior market analyst Kelvin Wong.
The Israeli and US strikes against Iran on Tuesday prompted Iranian attacks on energy infrastructure, which accounts for nearly one-third of global oil production. Iraq, the second-largest crude producer in OPEC, has cut its output by nearly 1.5 million barrels per day due to storage limits and a lack of an export route.
Iran has also targeted tankers in the Strait of Hormuz, through which about one-fifth of the world's oil and liquefied natural gas flow. The Strait remains closed to traffic, with US President Donald Trump suggesting that the US Navy could escort vessels through it if necessary.
In response to the crisis, countries and companies are seeking alternative routes and supplies. India and Indonesia have announced plans to find new energy sources, while some Chinese refineries are shutting down or delaying maintenance.