Oil Prices Spike on US-Iran Conflict and Regional Supply Concerns

Oil prices rose for a second consecutive session on Tuesday due to ongoing concerns about Middle East supply disruptions caused by the US-Iran conflict. Despite signs of recovering crude exports from the region, Brent crude futures increased by $1.49 (1.4%) to $106.77 per barrel, while US West Texas Intermediate crude rose by $1.34 (1.5%) to $93.94.

According to KCM Trade chief analyst Tim Waterer, 'A clearer picture is emerging of higher oil export volumes leaving the Gulf, but much of that increase still relies on workarounds such as ship-to-ship transfers.' These methods are less efficient and more costly than normal operations, which is why crude prices remain elevated.

Crude exports from major Middle Eastern producers climbed to 12.8 million barrels per day in September, the highest since February, preliminary figures from data provider Kpler showed on Monday. The US and Iranian officials spoke separately with mediators in a renewed effort to end seven months of war, further talks are widely expected to focus on an amended version of a seven-day proposal that Iran presented last week.