Oil rises as escalating Middle East military tensions fuel supply concerns
Oil prices climbed sharply today as fears of renewed conflict in the Middle East gripped markets after Iran released footage showing commandos boarding a cargo ship in the Strait of Hormuz, with little sign of progress toward reopening...
Oil prices climbed sharply today as fears of renewed conflict in the Middle East gripped markets after Iran released footage showing commandos boarding a cargo ship in the Strait of Hormuz, with little sign of progress toward reopening the crucial shipping lane.
Traffic through the strait, which before the war handled roughly a fifth of global oil output, remains effectively shut down. Iran’s seizure of two cargo ships has also underscored the challenges Washington faces in trying to secure passage through the waterway.
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Brent crude futures rose $2.18, or 2.1%, to $107.25 a barrel this morning, while US West Texas Intermediate futures added $1.78, or 1.9%, to reach $97.63.
For the week, Brent has gained 18% and WTI 16%, marking the second-biggest weekly advances since the war started.
“There is no de-escalation in sight,” said Tamas Varga of oil broker PVM.
US President Donald Trump said Iran may have increased its weapons stockpile “a little bit” during a two-week ceasefire, though he also said the US military could wipe it out in a single day. On Wednesday, he said he would extend the ceasefire indefinitely to leave room for further peace talks.
The ceasefire is increasingly appearing to be a staging period for another round of fighting, Haitong Futures said in a report. The firm added that if peace talks show no meaningful progress by the end of April and hostilities resume, oil prices could push to fresh highs for the year.
“There’s set to be fresh financial pain ahead as key shipments from the region remain blocked,” said Susannah Streeter, chief investment strategist at UK investment service Wealth Club. “That is set to keep costs elevated for a vast array of commodities.”
While investors and governments worldwide search for a durable peace, Trump said he would not impose a “timetable” for bringing the conflict to an end and insisted he wanted to make “a great deal.”
“Don’t rush me,” he said when asked how long he was willing to wait for a long-term deal.