DistantNews
Support us
🇳🇬 Nigeria /Economy & Trade

Iran tensions, supply fears lift oil above $90

From The Punch · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Global oil prices surpassed $90 per barrel due to heightened military tensions in the Middle East and concerns over crude supply disruptions.
  • Renewed hostilities involving the U.S., Saudi Arabia, and Iran, including strikes in Iraq and intercepted missile attacks, fueled market fears.
  • The market remains volatile, with analysts predicting prices to fluctuate between $80 and $100 as the geopolitical situation evolves.

Global oil prices surged above $90 a barrel on Wednesday, driven by escalating military tensions in the Middle East and renewed fears of crude supply disruptions. Brent crude reached $90.39 per barrel, reflecting growing anxiety as conflicts involving the United States, Iran, and regional allies intensified.

The price rally followed fresh military developments, including U.S. and Saudi Arabia launching strikes against Iran-backed groups in Iraq, which they accused of drone attacks on Saudi oil facilities. These actions occurred shortly after the U.S. military reported intercepting an Iranian missile attack targeting American troops. Iran also claimed to have fired on ships in the Strait of Hormuz and U.S. bases in Jordan, further unsettling the market.

Renewed military strikes in the Middle East and Iranian officials reiterating that they want to control shipping activity through the Strait of Hormuz amid depressed oil flows through the Strait are lifting oil prices again.

— Giovanni StaunovoUBS analyst commenting on the factors driving oil prices higher.

Concerns over oil shipments through the Strait of Hormuz, a vital energy transit route, are mounting. Adding to the uncertainty, Iran rejected Oman's proposal for joint regional management of the strait, diminishing hopes for resolving the ongoing impasse. Shipping activity remains subdued, with only a few commodity vessels transiting the Strait of Hormuz this week. Yemen's Houthi group is also reportedly considering imposing fees on commercial vessels in the southern Red Sea, introducing another layer of risk to global shipping.

Analysts anticipate continued volatility in oil prices. UBS analyst Giovanni Staunovo noted that renewed strikes and Iranian officials' statements about controlling shipping activity are lifting prices. Suvro Sarkar of DBS Bank believes Brent oil prices will likely continue to fluctuate within the $80-$100 range in the near term as the Middle East conflict ebbs and flows.

We believe Brent oil prices will continue to whipsaw in the $80-$100 per barrel range in the near term as the conflict ebbs and flows in the Middle East.

— Suvro SarkarHead of Energy Research at DBS Bank discussing future oil price volatility.
DistantNews Editorial

Originally published by The Punch. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog