Oil Rises Over 1% as Middle East Crisis Pushes Prices Near Peak
Global oil prices rose more than 1% during Wednesday's trading (Aug 19), hovering near three-week highs. Brent crude climbed approximately 1.3% to US$92.21 per barrel, while WTI rose about 1.8% to US$86.45 per barrel. Brent touched its highest level since July 30, and WTI reached its highest point since July 24.
The rally was primarily driven by growing concerns over escalating conflict in the Middle East. The United Arab Emirates decided to suspend all financial and economic transactions with Iran following a recent spike in tensions, heightening market fears regarding regional stability and the smooth flow of energy supplies.
Risks surrounding the Strait of Hormuz remain a key factor. Shipping activity through this strategic waterway remains sluggish as most shipowners opt to avoid the area. Uncertainty regarding the reopening of the route has led the market to continue factoring a geopolitical risk premium into oil prices.
US-Iran diplomatic tensions show no signs of easing. US President Donald Trump stated that no talks with Iran were underway and claimed the Strait of Hormuz was open. However, Tehran disputed this claim, insisting the waterway remains closed.
The situation became increasingly sensitive after a temporary ceasefire agreement expired on Monday. A senior Iranian official stated that the country is shifting toward a more offensive military posture due to the diplomatic stalemate, although no new attacks from either side were reported on Tuesday.
Newsmaker Analysis: Oil market sentiment remains bullish as long as Middle East tensions and uncertainty regarding Hormuz persist. Brent trading above US$92 indicates a widening risk premium. Should the conflict escalate further or shipping through Hormuz face greater disruption, oil prices could continue to rise. Conversely, signs of de-escalation could trigger profit-taking following the sharp rally seen in recent sessions.
Source: Newsmaker.id
