Oil prices jumps 4% to 2-month high as tensions rise in Middle East
Oil prices rose more than 4% on Wednesday, to their highest in more than two months, after sources said the U.S. was preparing to evacuate its Iraqi embassy due to heightened security concerns in the Middle East.
Brent crude futures settled $2.90, or 4.34%, higher to $69.77 a barrel. U.S. West Texas Intermediate crude gained $3.17, or 4.88%, to $68.15. Both Brent and WTI reached their highest since early April.
Surprised traders bought crude futures on reports the U.S. was preparing to evacuate its embassy in Iraq, OPEC's No. 2 crude producer after Saudi Arabia. A U.S. official said military dependents could also leave Bahrain.
"The market wasn't expecting this big geopolitical risk," said Phil Flynn, analyst at Price Futures Group.
Earlier, Iran's Minister of Defense Aziz Nasirzadeh Tehran will strike U.S. bases in the region if nuclear talks fail and conflict arises with Washington.
Trump said he was less confident that Iran would agree to stop uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday.
Ongoing tension with Iran means its oil supplies are likely to remain curtailed by sanctions.
Supplies will still increase, as OPEC+ plans to boost oil production by 411,000 barrels per day in July as it looks to unwind production cuts for a fourth straight month.
Source: Reuters
