Oil Prices Spike Amid Escalating Tensions Between US and Iran
Oil prices surged over $1 per barrel on Monday as tensions between the US and Iran escalated, prompting concerns of prolonged supply disruptions from the Middle East.
Brent crude futures rose by $1.20, or 1.25%, to $97.48 a barrel, while U.S. West Texas Intermediate crude climbed to $92.62 a barrel, up $1.14 cents, or 1.25%.
The price hike comes after the US and Iran exchanged attacks on vessels in the Strait of Hormuz, a major oil shipping route that accounts for nearly a fifth of global supply.
According to analytics firm Kpler, an average of 10 commodity ships transited the Strait of Hormuz per day over the past 10 days, which is the lowest since May.
Priyanka Sachdeva, head of market insights at Phillip Nova, warned that if tanker traffic slows down significantly, 'the market could price in a much larger supply shock.'