Oil Prices Plunge Amid Escalating Middle East Tensions

Oil prices have taken a hit due to escalating tensions in the Middle East. Brent futures fell $3.59, or 3.57%, to $97.10 a barrel at 1240 GMT on July 24, after reaching above $100 for the first time since May.

The price drop comes as US President Donald Trump threatened Iran with a 'massive attack' in an interview with Axios. He stated that he is close to making a decision and that the US will hold Iran responsible if the Houthis attack Saudi oil tankers again.

Disruptions in the Strait of Hormuz and outages in the Red Sea have driven prices up as supply becomes squeezed once again, according to Rystad analyst Janiv Shah. Daily vessel transits through the Strait of Hormuz were steady at three for each of the past three days, while commodity vessel transits totalled 32 on July 23 in the Bab el-Mandeb strait.

Analysts at JPMorgan predict that each additional month of disruption to oil supply would add around $7 to $8 a barrel to Brent. With disruptions extending beyond two months, prices could lift monthly average prices to around $114 a barrel.