Oil Prices Surge on Escalating Middle East Tensions
Oil prices surged to a two-week high on Monday after an attack on the Barakah nuclear power plant in the United Arab Emirates. The Brent crude futures rose by 86 cents, or 0.79%, to $110.12 a barrel, while US West Texas Intermediate crude was up 89 cents, or 0.84%, at $106.31.
The attack on the UAE nuclear power plant, along with drone attacks in Saudi Arabia and escalating rhetoric from the United States and Iran, raised concerns of an escalation in the conflict.
PVM analyst Tamas Varga noted that one billion barrels of oil have been trapped behind the Strait of Hormuz trade route, contributing to the recent price gains. The International Energy Agency's Fatih Birol also warned that commercial oil inventories are depleting rapidly, with only a few weeks of supplies left.
The US has allowed the lapse of a sanctions waiver on Russian seaborne oil, and President Donald Trump is expected to discuss military options with national security advisers on Tuesday. The conflict in the Middle East remains stalled, despite efforts from Pakistan to share a revised proposal from Iran with the US.