Oil prices are rising due to the escalating conflict between the U.S. and Iran
Oil prices continued to rise on Tuesday, September 1, amid renewed hostilities between the U.S. and Iran in the Middle East. The escalation of the situation heightened fears of potential disruptions to oil supplies from the world’s key oil-producing region.
Brent crude futures rose 56 cents, or 0.6%, to $91.05 per barrel.
Meanwhile, U.S. West Texas Intermediate (WTI) crude rose by 83 cents, or 1%, to $86.59 per barrel.
Thus, the market reacted to the renewed escalation in the Middle East and the risks to global energy supplies.
On Monday, U.S. President Donald Trump threatened Iran with new strikes following the first exchange of direct attacks between the two countries in a month.
The escalation comes against the backdrop of a conflict that has recently escalated into an economic confrontation as well.
Tim Waterer, chief market analyst at KCM, noted that possible retaliatory strikes by Iran pose additional risks to the energy sector.
According to him, this could lead to damage to energy infrastructure in the Persian Gulf region and increase uncertainty regarding shipping through the Strait of Hormuz.
According to data from the analytics firm Kpler, over the weekend, the number of visible tankers passing through the Strait of Hormuz dropped to five per day.
This is causing additional concern in the oil market, as the Strait of Hormuz is one of the world’s key energy transport routes.
Before the war began in late February, nearly 20% of global oil supplies passed through the strait.
Mediators, including Qatar and Oman, have stepped in to help resolve the situation. They are trying to facilitate an agreement that would allow normal shipping to resume through the Strait of Hormuz.
However, these diplomatic efforts have not yet yielded results.
Further escalation of the conflict between the U.S. and Iran could directly affect the stability of the oil market and global energy prices, especially in the event of disruptions to oil shipments through the Strait of Hormuz.
This was reported by Reuters.
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