Oil Prices Surge Amid US-Iran War Uncertainty and Strait of Hormuz Tensions
Crude oil prices have extended their rally to six consecutive days due to ongoing uncertainty over a potential US-Iran peace agreement and recent attacks on vessels in the Middle East. Brent crude futures rose by $0.81, or 72 cents, to $89.63 per barrel, while West Texas Intermediate (WTI) crude was up by $0.85, or 71 cents, at $83.91.
The gains come despite industry data showing a rise in US crude inventories. Oil prices have been highly responsive to developments surrounding efforts to reopen the critical shipping route of the Strait of Hormuz. Regional tensions remain elevated after a US Navy helicopter fired missiles at a Panama-flagged cargo ship attempting to breach an Iranian blockade.
Pakistan's Defence Minister, Khawaja Asif, said that 'things are shaping up in favor of peace', but did not provide further details. The US Energy Secretary Chris Wright noted that nearly 9 million barrels of oil per day are moving through the strait with assistance from the US military.
Crude oil prices have climbed more than 40% this year, while some refined product prices have risen even more sharply due to disruptions linked to the Russia-Ukraine conflict. The US expects oil supply disruptions related to the Iran conflict to average around 600,000 barrels per day through the end of 2027.