Oil Prices Soar as US-Iran Tensions Escalate with Joint Strikes in Iraq

Oil prices surged on Wednesday after joint strikes in Iraq by the United States and Saudi Arabia, and the interception of Iran's ballistic missiles aimed at US forces in the Middle East. Brent futures rose $3.15, or 3.8%, to $87.24 a barrel, while US West Texas Intermediate (WTI) crude increased $2.73, or 3.4%, to $81.99 a barrel.

The strikes were launched against Iran-backed groups in Iraq, which the US and Saudi Arabia blamed for drone attacks on Saudi oil facilities. Iran had warned that blaming it for such attacks was a 'major miscalculation'. The situation has escalated despite US President Donald Trump signaling a return to diplomacy in the region.

Suvro Sarkar, head of energy research at DBS Bank, predicts that Brent oil prices will continue to fluctuate in the $80-$100 per barrel range due to the ongoing conflict. He notes that even under a de-escalation scenario, oil prices could see higher floors around $80 per barrel.