Oil prices hit five-week high; Brent crude touches $92 amid US-Iran tensions

NEW DELHI: Brent crude prices hit $92 per barrel on Wednesday, climbing to a five-week high amid intensifying geopolitical tensions between the US and Iran.

Brent crude futures rose 50 cents, or 0.55 per cent, to $91.51 a barrel, while US West Texas Intermediate (WTI) crude futures gained 30 cents, or 0.36 per cent, to $84.64 a barrel after markets opened. At the time of reporting, Brent crude was trading at around $92.01 per barrel while crude oil was trading around $85.21 per barrel.

The United States Central Command (CENTCOM) said on Tuesday (local time) that it had completed its 11th consecutive night of strikes on Iran, targeting military operation centres, maritime capabilities, aircraft hangars, drone storage facilities and military logistics infrastructure.

In a statement, CENTCOM said the operation concluded at 8:15 pm ET on July 21 and was aimed at further degrading Iran’s ability to threaten commercial shipping in the Strait of Hormuz. “At 8.15 pm ET on July 21, US Central Command (CENTCOM) successfully completed the 11th consecutive evening of strikes against Iran”, the statement reads.

Market analyst Ajay Bagga noted, “Oil prices climbed to a five-week high, on worries that energy supply disruptions could worsen in the Middle East due to more attacks between the US and Iran and a threatened naval blockade of Saudi Arabia by Yemen’s Houthis.”

Bagga highlighted three major disruptions hitting oil markets together — Strait of Hormuz closure, the Houthis’ announcement of a maritime blockade of Red Sea shipments, and the Caspian export hub in the Black Sea suspending operations after tankers were hit there in the Ukraine-Russia conflict, impacting 1.6 mbpd of Kazakh oil evacuation.

Bagga further noted, “Brent at $92 is still showing complacency in the face of these factors hitting global oil markets all together,” adding, “The hope trade is of a temporary truce in US-Iran war”. However, he flagged, “A US attack on the Iranian mountain site said to hold Iranian nuclear material could escalate the conflict further”. “The situation is too volatile and could go either way based on decisions made by the US and Iranian leadership”, Bagga noted. (ANI)