US-Iran Tensions Fuel Record Oil Price Gains
Oil prices are set to end the week on a high note, gaining more than 6% as tensions between the US and Iran escalate. The seventh month of their conflict has seen renewed military exchanges, disrupting oil flows and driving up prices.
The Brent crude futures have risen by 6.1%, while US West Texas Intermediate crude futures have gained 8.3%. However, both contracts dipped lower on Thursday, with Brent down 0.79% at $94.77 a barrel and WTI down 1.04% at $90.35.
Claudio Galimberti, chief economist at Rystad Energy, warned that the global economy may be heading for a hard landing due to the rally in oil prices and fuel costs. Average US diesel prices have hit record highs, and analysts point to supply disruptions caused by Ukrainian attacks on Russian refineries.
Despite claims from the US government that Middle Eastern oil flows have returned to near normal levels, analysts and tanker trackers say flows remain seriously disrupted. The ongoing uncertainty around the Strait of Hormuz has repriced risk higher, according to Tim Waterer, chief market analyst at KCM Trade.