Oil Rises, Hormuz Under Increasing Threat
Oil prices are headed for their biggest weekly increase since April, as signs of escalating conflict in the Middle East mount. This has rekindled market concerns about supply disruptions through the Strait of Hormuz.
Brent crude rose above US$86 per barrel and is on track to gain around 13% in a week. This increase occurred after Iran attacked water and power facilities in Kuwait, causing damage to several generating units.
The attacks followed a renewed wave of attacks by the United States on Iran, including on defense targets. Iran retaliated by targeting US bases in Kuwait, Jordan, and Bahrain, while Qatar claimed to have intercepted missiles aimed at its territory.
The rise in oil prices was also fueled by concerns about the Strait of Hormuz, a vital waterway through which about a fifth of global oil flows pass. If shipping activity is further disrupted, energy markets risk facing greater supply pressures.
The pressure is not limited to crude oil, but also to food products such as diesel and gasoline. Fuel markets in the US and Europe are showing increasingly tight conditions, especially after Russian exports declined due to the Ukrainian attack on oil refineries and the ban on diesel exports from Moscow.
As a result, oil prices have the potential to remain high as long as the security risks in Hormuz remain unabated. Increased energy prices could increase global inflationary pressures, burden consumers, and make central banks more cautious in setting interest rates. (asd)
Source: Newsmaker.id
