Middle East Tensions Escalate: Oil Prices Surge Amid New Conflict

Brent crude saw a significant jump of 10% to approximately $80 a barrel over the counter on Sunday, influenced by U.S. and Israeli strikes on Iran that have intensified conflict in the Middle East, oil traders reported. Analysts predict prices could reach up to $100 if tensions persist.

The global oil benchmark rallied earlier this year, achieving $73 a barrel last Friday, its highest since July. The rise is attributed to growing uncertainties regarding incoming attacks, which materialized subsequently. According to Ajay Parmar, energy and refining director at ICIS, the closure of the Strait of Hormuz plays a crucial role in supporting these escalating prices.

Most shipping activities involving crude oil, fuel, and liquefied natural gas through the Strait of Hormuz have been ceased by tanker owners, oil majors, and trading houses. Tehran has issued warnings against passage through the Strait, impacting over 20% of global oil transport. The potential for prices to hit $100 or more looms if a prolonged closure occurs, as noted by Parmar.