Oil Prices Surge Amid Escalating Gulf Tensions
Oil prices have surged to four-month highs as tensions in the Gulf escalate and the prospect of peace appears increasingly remote. The latest Brent crude price stands at $107.86 per barrel, while West Texas Intermediate (WTI) is trading for $102.28 per barrel.
The sharp weekly gain of 13% since last week's prices marks the largest increase since mid-July, according to Reuters. Analysts attribute this resilience to a market repricing both the duration and severity of the conflict in the region.
ING commodity analysts point out that while some volumes are still moving through the Strait of Hormuz, flows remain below pre-war levels, underscoring the fragile situation.
The intensifying attacks by Yemeni Houthis on Saudi energy infrastructure and tanker traffic in the Red Sea have contributed to rising oil prices. The Houthis' advance along the Red Sea coast has also taken control of the Yemeni port city of Mokha, giving them a direct presence near one of the world's most vital straits.
IG's Tony Sycamore predicts that WTI crude may retest its $119.48 high from early March as events spiral and Iran shows willingness to prolong the conflict.