US-Iran Conflict Drives Oil Prices Higher Amid Supply Disruptions
Oil prices have risen for a second consecutive week due to concerns over supply disruptions in the Middle East. The US-Iran conflict continues to curtail production from major oil producers such as Saudi Arabia, Iraq, and the United Arab Emirates.
Brent crude futures fell 23 cents to $93.55 a barrel after gaining more than 7% in the previous five days. Meanwhile, West Texas Intermediate (WTI) crude futures slipped 33 cents to $86.50 a barrel after climbing more than 8% in the same period.
The continued uncertainty surrounding the US-Iran conflict has led BMI, a unit of Fitch Solutions, to review its Brent price outlook for this month. According to Tony Sycamore from IG, both sides are 'dug in' and lacking time to play the waiting game amidst rising crude prices.
The Strait of Hormuz, through which about one-fifth of global oil consumption is transported, has seen a significant decline in ship traffic due to the conflict. This has added to the supply disruptions caused by the Iranian shut-in and US naval blockade on Iran.