Oil Prices Surge on Fresh Attacks, Supply Disruptions in Middle East

Oil prices continued their upward trend on Wednesday as concerns over supply disruptions in the Middle East intensified. The Brent crude futures price rose by 72 cents, or 0.81%, to $89.63, while US West Texas Intermediate (WTI) crude gained 71 cents, or 0.85%, to $83.91.

The increase came despite industry data showing a rise in US crude inventories. The latest supply concerns were triggered by reports of attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb Strait. Iran's top security official, Mohsen Rezaei, said the Strait of Hormuz would remain closed unless Washington agreed to Tehran's conditions for ending the war.

Supply disruptions have raised fears of further price hikes. JPMorgan estimates that every additional month of disruption could push Brent up by about $7 to $8 a barrel. Goldman Sachs has similarly warned that Brent could rise to $120 a barrel if shipping disruptions through the Strait of Hormuz continue.