Oil Prices Rise As Hostilities Worsen In Middle East
Oil prices have risen as U.S. military strikes against Iranian installations escalate tensions in the Middle East. The conflict threatens key energy shipping routes, specifically the Strait of Hormuz, leading to market volatility.
Why it matters
Disruptions in the Strait of Hormuz impact global energy supply chains and can lead to significant fluctuations in international fuel prices.
Oil extended gains as the U.S. said it had begun a new wave of strikes against Iranian military installations on Wednesday, aiming to limit Tehran’s ability to strike commercial shipping in the Strait of Hormuz.
Washington had earlier reimposed a naval blockade of Iranian ports and launched overnight strikes, prompting Iran’s Islamic Revolutionary Guard Corps to threaten to close “all other export corridors that benefit the U.S. and its allies”.
Brent futures gained 18 cents, or 0.2%, to $84.91 a barrel at 1214 GMT. West Texas Intermediate futures rose 26 cents, or 0.3%, to $79.60 a barrel.
Oil prices settled up 2% at a one-month high on Tuesday as attacks exacerbated a supply disruption in the Strait of Hormuz, through which about a fifth of the world’s oil and liquefied natural gas passed prior to the war’s outbreak.
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