Oil Prices Soar as Middle East Tensions Escalate
Oil prices surged on July 29 as tensions in the Middle East escalated. Brent crude futures rose $6.16, or 7.33 percent, to $90.25 a barrel by late morning in New York.
The increase was driven by renewed military strikes against Iran-backed groups in Iraq and Iranian officials' statements that they want to control shipping activity through the Strait of Hormuz. UBS analyst Giovanni Staunovo attributed the price hike to these factors, saying 'Renewed military strikes in the Middle East and Iranian officials reiterating that they want to control shipping activity through the Strait of Hormuz amid depressed oil flows through the strait are lifting oil prices again.'
The US and Saudi Arabia launched strikes on Iran-backed groups in Iraq on July 29, blaming them for drone attacks on Saudi oil facilities. The strikes followed a US military announcement that it had thwarted a surprise Iranian attack on American troops in the region.
Oil prices continued to climb after President Donald Trump told Fox News that additional strikes against Iran were planned. Analysts believe that Brent oil prices will remain volatile, with some predicting they could continue to whipsaw between $80 and $100 per barrel.