On June 13, oil prices rose 9% to their highest level in nearly five months after Israel struck Iran. This has heightened tensions in the Middle East and raised concerns about possible disruptions in oil supplies, informs Reuters.
Brent crude oil futures rose by \$6.29 (9.07%) to $75.65 a barrel, reaching an intraday high of $78.50, the highest level since January 27. American WTI oil rose by $6.43 (9.45%) to $74.47 per barrel after peaking at $77.62, the highest since January 21.
This was the biggest increase in the prices of both types of oil since 2022, when Russia’s invasion of Ukraine also led to a sharp rise in the cost of energy. Israel said it had struck Iran’s nuclear facilities, ballistic missile factories and military command centers, launching what it said was a “prolonged operation” to prevent Tehran from developing nuclear weapons.
“This has significantly increased geopolitical uncertainty, and the oil market is forced to price in the increased risk of potential supply disruptions,” ING analysts led by Warren Patterson said in a note.
Several oil traders in Singapore said it was too early to predict the impact of the strikes on Middle East oil supplies, depending on Iran’s response and possible US intervention.
“It is still too early to judge, but the market fears that the Strait of Hormuz may be blocked.” – explained the traders.
MST Marquee senior analyst Sol Kavonic said oil supplies would only be seriously affected if Iran retaliated with strikes on the region’s oil infrastructure. He also noted that in extreme cases, Iran could stop up to 20 million barrels per day by attacking infrastructure or blocking the Strait of Hormuz.
