Oil Prices Soar as Gulf Conflict Heats Up
Oil prices surged more than 4% in trading on Friday (August 17th), hitting their highest level in more than a month. This increase was triggered by escalating attacks between the United States and Iran in the Gulf region, as well as concerns about disruptions to energy shipping routes.
Brent crude rose US$3.87, or 4.59%, to US$88.10 per barrel. Meanwhile, West Texas Intermediate (WTI) gained US$3.54, or 4.48%, to US$82.49 per barrel. Both are at their highest levels since mid-June.
On a weekly basis, Brent and WTI both rose by around 16%. Brent is on track for its third consecutive weekly gain, while WTI is headed for its second weekly gain.
Tensions escalated after the US attacked bridges and airports in Iran. In retaliation, Tehran attacked power generation and water desalination facilities in Kuwait and claimed to have launched additional attacks on US facilities in the Middle East, including the first direct attack on Syria.
Market concerns are growing as the threat to shipping lanes extends beyond the Strait of Hormuz and potentially extends to the Red Sea. If more tankers are attacked, ship owners could refuse entry to the Persian Gulf, further disrupting oil supplies.
Consequently, oil prices have the potential to remain strong as long as the US-Iran conflict persists. Rising energy prices could again drive global inflationary pressures, depress consumer purchasing power, and make central banks more cautious about lowering interest rates.
Source: Newsmaker.id
