Oil Prices Soar as US-Iran War Enters Prolonged Phase

Oil producers and traders are bracing for a prolonged war between the US and Iran in the Persian Gulf, which will likely result in higher oil prices for longer. The mood at this year's Asia Pacific Petroleum Conference was described as 'not particularly cheerful' by Reuters' Clyde Russell, who reported on the escalating hostilities in the Middle East.

The Asian oil industry wants Trump to leave the Persian Gulf and let local countries deal with the situation, but this is an unlikely scenario. As a result, drillers, traders, and refiners are preparing for a long disruption in oil flows out of the Middle East and waiting for the US midterm elections.

Brent crude prices have risen above $100 per barrel, while futures prices often cost more due to surging insurance and freight rates. The US naval blockade on Iranian ports and the grab for Venezuelan crude are cutting off two main supply channels, leading to higher prices for physical deliveries.