Oil Prices in the Spotlight, Soaring Rapidly!
Oil prices rebounded on Wednesday (July 15th) after tensions in the Middle East escalated. United States President Donald Trump reimposed a naval blockade on all Iranian ports, while Tehran launched attacks on several US infrastructure in the region.
Brent crude rose 99 cents, or 1.2%, to US$85.72 per barrel, while West Texas Intermediate (WTI) gained 64 cents, or 0.8%, to US$79.98 per barrel. In the previous session, oil prices had closed up around 2% to their highest level in a month.
This increase was triggered by increasing supply disruptions in the Strait of Hormuz, a vital waterway that previously carried about a fifth of the world's oil and LNG supplies. Iran reiterated its claim to have closed the strait after the conflict with the US escalated and a previously fragile ceasefire began to crumble.
The US also launched new strikes to weaken Iran's ability to attack commercial shipping in the Strait of Hormuz. On the other hand, Trump said energy targets would be saved for the final stage, but left open the possibility of attacking Iran's energy infrastructure if the conflict continues.
As a result, oil prices have the potential to remain high as long as the risks from Hormuz, drone attacks, and threats to energy facilities remain unabated. If the conflict escalates and damages Gulf energy infrastructure, oil could return to near US$100. However, if diplomacy succeeds in opening the Hormuz waterway, price pressures could begin to ease. (asd)
Source: Newsmaker.id
