Oil prices are rising today due to renewed military strikes between the United States and Iran. North Sea Brent crude showed growth of about 2.9 percent shortly before 8:00 CEST and was trading near $90.70 per barrel. American light crude West Texas Intermediate (WTI) gained nearly 2.8 percent and was trading near $85.70 per barrel.
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New strikes increase tension in the Middle East
American forces on Sunday struck two Iranian missile launch facilities on Larak Island located in the northern part of the Strait of Hormuz. According to Reuters agency, these were the first known American strikes on Iran since late July. Iran’s Revolutionary Guards subsequently stated that they attacked American bases in Jordan and the United Arab Emirates in retaliation.
The conflict in the Middle East was triggered in late February by American-Israeli attacks on Iran. The war has crippled shipping traffic in the Strait of Hormuz, through which approximately one-fifth of the world’s oil supplies had previously passed.
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Oil may remain between $85 and $95 per barrel
Analyst Suvro Sarkar from DBS said he now expects a more limited military confrontation between the US and Iran rather than a more lasting escalation of the conflict. However, he pointed out that each new escalation of the situation affects the timeline for reopening the Strait of Hormuz.
“Previously, we hoped for a return to negotiations on an agreement between the US and Iran by the end of the third quarter, but that now looks less likely. Therefore, we expect oil prices to continue to hold in the range of $85 to $95 per barrel until the situation around the Strait of Hormuz becomes clearer,” Sarkar stated.
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Source: ÄŒTK
