US-Iran Conflict Sends Oil Prices Soaring as Disruptions Loom
The recent exchange of airstrikes between the US and Iran has escalated tensions in the Middle East, causing oil prices to surge. On September 2, Brent crude futures rose by $0.99, or 2%, to $96.54 a barrel, while US West Texas Intermediate crude futures increased by $1.55, or 1.52%, to $92.
The US Central Command stated that the strikes came in response to recent attempts by Iran's Islamic Revolutionary Guard Corps (IRGC) to attack commercial shipping in the Strait of Hormuz and American service members deployed in the region.
Iran's IRGC claimed that the US attacks would further restrict traffic through the Strait of Hormuz, a key waterway carrying about one-fifth of the world's consumed oil. The bank JPMorgan estimates that each additional month of disruption could lift Brent prices by around $7 to $8 a barrel.
Goldman Sachs has also warned that Brent could rise to $120 a barrel if shipping disruptions through the Strait of Hormuz persist.