Oil Prices Soar as Middle East Tensions Escalate Again
Oil prices surged over 4% on Wednesday after renewed military confrontation between the United States, Saudi Arabia and Iran heightened fears of prolonged supply disruptions in the Middle East.
The price jump came as traders reassessed the likelihood of a sustained disruption to oil exports from the Gulf, home to roughly a third of global seaborne crude shipments, amid growing uncertainty over the security of the Strait of Hormuz, the world’s most critical oil shipping chokepoint.
Brent crude futures rose $3.72, or 4.4%, to $87.81 a barrel by 1025 GMT, while U.S. West Texas Intermediate (WTI) gained $3.43, or 4.3%, to $82.69 a barrel, extending a rally driven by mounting geopolitical risks.
Suvro Sarkar, head of energy research at DBS Bank, said the market is likely to remain highly sensitive to military developments, predicting that Brent oil prices will continue to whipsaw in the $80-$100 per barrel range in the near term as the conflict ebbs and flows in the Middle East.