Oil Prices Soar as U.S.-Iran Conflict Escalates in Strait of Hormuz
Oil prices held near six-week highs on Monday, reaching as high as US$97.93 per barrel for Brent crude futures and US$92.27 per barrel for U.S. West Texas Intermediate (WTI) crude.
The gains come amid heightened supply disruption concerns following tit-for-tat strikes between the U.S. and Iran in the Strait of Hormuz, a major oil shipping route.
Iran's Islamic Revolutionary Guard Corps said it targeted three oil tankers traveling through unauthorized routes on Saturday, as well as three U.S.-linked vessels in other areas.
The attacks represented a 'major escalation', according to Marisks, a maritime intelligence firm, which added that commercial tankers are now being deliberately used as instruments of reciprocal economic pressure.
Goldman Sachs said oil prices may rally to as much as US$120 per barrel if attacks on shipping rise, while the United Arab Emirates is building alternative routes for its energy exports and trade to ensure they are not 'held hostage' by the ongoing war between the U.S. and Iran.