US-Iran Conflict Drives Oil Prices Higher Amid Supply Disruption Concerns
Oil prices surged on Wednesday as concerns over supply disruption intensified following a series of airstrikes between the US and Iran. Brent crude futures rose $1.03, or 1.1 percent, to $95.68 a barrel by 09:05 a.m. Saudi time, while US West Texas Intermediate crude futures climbed 61 cents, or 0.7 percent, to $90.83.
The conflict escalated overnight, with the Islamic Revolutionary Guard Corps stating that US attacks would further restrict traffic through the Strait of Hormuz, a critical waterway that carries about one-fifth of global oil consumed before the conflict.
ING analysts noted that developments in recent days have brought risks to regional oil supplies back into focus, and warned that rising tensions clearly put crossings at risk. The IRGC also claimed to have targeted a US military base in Jordan with ballistic missiles, although Jordan's military said its air defences intercepted 10 of 13 missiles.
Priyanka Sachdeva, Phillip Nova’s head of market insights, stated that the oil market is no longer pricing just the risk of war; it is increasingly pricing the cost of an unresolved war. The latest exchange followed a weekend flare-up in hostilities and came after attacks on two tankers departing the Strait of Hormuz on Monday.