Oil Prices Jump 3% on Iran-US Escalation
World oil prices surged more than 3% in Monday trading, following renewed geopolitical tensions in the Middle East. The increase occurred after Iran and the United States launched attacks on each other, while Israel ordered its troops to move deeper into Lebanon in its conflict against Tehran-backed Hezbollah.
West Texas Intermediate (WTI) crude rose US$2.88, or 3.3%, to US$90.24 per barrel at 07:01 GMT. Meanwhile, Brent crude gained US$2.78, or 3.05%, to US$93.90 per barrel. This surge reflected growing market concerns about the risk of energy supply disruptions from the Middle East.
Market sentiment had previously improved following hopes for an extension of the ceasefire between the US and Iran. This optimism pushed Brent and WTI prices down 1.8% and 1.7%, respectively, on Friday. However, those hopes dimmed after Washington declared it had carried out "self-defense" strikes against radar and drone control facilities in Goruk and Qeshm Island, Iran.
Meanwhile, Iran's Islamic Revolutionary Guard Corps (IRGC) stated that its aerospace forces targeted an airbase allegedly used in a US attack on a telecommunications tower on Sirik Island. US President Donald Trump had previously said he would soon decide on a ceasefire extension proposal, but the latest escalation has the market refocusing on the potential for a wider conflict, including the role of Israel and Hezbollah in the de-escalation process.
Main causes of the oil surge:
Iran-US tensions have escalated again, the risk of the Israel-Hezbollah conflict widening, and hopes for a ceasefire extension are fading. The market is also concerned that the conflict will disrupt energy supply lines in the Middle East.
Things to watch:
Market focus will continue on Donald Trump's decision regarding the ceasefire proposal, Iran's response, Israel's movements in Lebanon, and potential disruptions to oil supplies if the conflict escalates further.
Source: Newsmaker.id
