11 September:International oil prices have surged again as the conflict surrounding the Iran war intensifies across the Middle East, with Brent crude, the global benchmark, rising to $108 a barrel at one point. It was the first time since May that Brent had reached that level, as traders increasingly prepared for the possibility of prolonged disruptions to global oil supplies.
According to CNN, oil prices crossed the $100-a-barrel threshold again this week amid heightened military tensions around the Strait of Hormuz and the Red Sea. Reciprocal attacks between the United States and Iran, along with attacks by Iran-backed Houthi forces on Saudi Arabia and rising tensions around the Bab el-Mandeb Strait, have further complicated the situation.
Brent crude climbed as much as 7.1 percent during the session to reach $108 a barrel before easing to close at $107.63. The benchmark gained 6.34 percent on the day, marking its highest closing price since May 19 and its largest one-day increase in nearly six weeks.
US benchmark West Texas Intermediate (WTI) crude also rose sharply, gaining as much as 7.3 percent to reach $103 a barrel. It was the first time since May that WTI had crossed the $103 mark. The price later eased to finish at $102.48, up 6.69 percent for the day. It was WTI’s highest closing level since May 19 and its biggest one-day gain in two months.
The renewed escalation in fighting has heightened concerns that global oil supplies could face further disruptions. Particular attention is focused on the Strait of Hormuz, a critical shipping route through which a significant volume of the world’s crude oil is transported.
Jason Tuvey, deputy chief emerging markets economist at Capital Economics, said in a note that increased tensions in the Strait of Hormuz and intensified Houthi attacks against Saudi Arabia suggest that Iran and its allies are seeking to regain the initiative in the conflict.
According to Tuvey, the developments could further delay the recovery of oil production in the Gulf region and increase the risk of higher energy prices in global markets over the coming weeks.
For the first time since the war began, S&P Global Energy said on Thursday that it no longer expects Middle Eastern oil production to return to pre-war levels by the end of next year. The firm also no longer anticipates a definitive end to the conflict or a return to normal conditions in the Strait of Hormuz by the end of 2027.
Under its latest forecast, S&P Global Energy expects oil prices to remain relatively high throughout next year, with crude likely to trade between $80 and $100 a barrel.
US President Donald Trump, however, offered a more optimistic assessment on Wednesday night, promising a rapid return to cheaper fuel. He said energy prices would fall sharply soon after the November 3 election and claimed the war would also end shortly after the vote.
Jim Burkhard, global head of crude oil research at S&P Global Energy, gave a different assessment of the market outlook. He said the market was no longer returning to a state of “calm.” According to him, global oil markets are gradually adjusting to a new reality shaped by unresolved conflict and continuing risks to maritime shipping routes.
Source: CNN