Oil Prices Soar Amid Ongoing Middle East Tensions
The oil market is experiencing a significant surge in prices due to ongoing tensions in the Middle East. On Thursday, Brent Crude and West Texas Intermediate, two global benchmarks, rose by over 7% each, with WTI crossing the $100-per-barrel mark for the first time since late spring.
The price increase is attributed to a combination of factors, including escalating attacks on shipping in the Persian Gulf and renewed Houthi attacks on Saudi Arabia. As a result, oil shipments out of the Middle East have decreased by 65% compared to last year, with the cost of transporting crude to Asia reaching a record high.
Bhushan Bahree, an executive director of oil markets at S&P Global Energy, projects that prices will remain in the $80-$100 range through next year. According to Bahree, this is due to the lack of expectation for a swift end to the US-Iran conflict, which has created uncertainty and volatility in the market.
Gernot Wagner, director of the Climate Knowledge Initiative at Columbia Business School, predicts that oil prices will not drop below $90 per barrel. He believes that the new normal is pricing in volatility and uncertainty, rather than a stable higher price.