Oil Prices Soar as Iran-US Tensions Escalate

International oil prices surged on Wednesday, August 12, amidst ongoing tensions between Iran and the United States. The Strait of Hormuz and Bab al-Mandab have become major concerns for global energy supply due to shipping disruptions in these waterways.

On Tuesday, both US West Texas Intermediate (WTI) and Brent crude oil prices rose by more than one dollar, pushing oil prices to their highest level since July 31. The Asian market saw a 72-cent increase in Brent crude prices, or 0.81 percent, to $89.63 per barrel.

US West Texas Intermediate (WTI) crude oil prices increased by 71 cents, or 0.85 percent, to $83.91 on the same day. The Strait of Hormuz, a critical waterway for global energy supply, saw only six vessels transit it on Monday compared to an average of 11 vessels over the preceding 10 days.

Iran's top security official, Mohsen Rezaee, stated that the Strait of Hormuz would remain closed until the United States accepts Iran's conditions for ending the war. The US Energy Information Administration (EIA) forecasts a deficit of approximately 600,000 barrels per day in crude oil supply from the Middle East until the end of 2027.