“Oil prices have increased sharply to the highest level since January after the United States has joined Israeli in Iran’s nuclear objects on weekends, which caused concern about oil supply.”, – WRITE: epravda.com.ua
About it reports Reuters.
Brent oil futures increased by $ 1.52 (1.97%) to $ 78.53 per barrel. US WTI went up by $ 1.51 (2.04%) – up to $ 75.35 a barrel. Both contracts had previously jumped by more than 3% – to $ 81.40 and $ 78.40, respectively, reaching a five -month maximum before declining.
The rise in prices occurred after US President Donald Trump said he had “destroyed” Iran’s main nuclear objects on weekends, joining the Israeli attack against the background of exacerbation of the conflict in the Middle East. In response, Tehran promised to defend himself. Iran is the third largest oil producer among OPEC countries.
Market participants expect a further increase in prices against the background of increasing fears, which in response Iran can block the Ormouz Strait, through which approximately a fifth of world oil supplies.
“Current geopolitical escalation is a key factor that can push Brent prices even higher-up to $ 100, and $ 120 per barrel looks more realistic,” said SS Wealthstreet SS Wealthstreet, SS Wealthstreet.
Iranian state television Press TV reported that Iran’s Parliament approved the decision to close the strait. Iran has repeatedly threatened to do so before, but never realized this threat.
On Monday, Iran and Israel exchanged air and rocket strokes, against the background of an increase in international tension due to the expected reaction of Iran on the US attack on its nuclear facilities.
“The risks of damage to the oil infrastructure have increased significantly,” said Senior Analytics SPARTA Commodities Jun Go. Although there are alternative oil pipelines from the region, certain volumes of oil will not be exported if the Strait is not available. Ship companies will also be increasingly avoided by this region, it added.
Goldman Sachs estimates on Sunday report if the oil flow through this strategic duct will decrease half a month, the Brent price can briefly jump to $ 110 per barrel and supply will remain reduced by 10% for the next 11 months.
Also read: How does exacerbation in the Middle East affect the prices of oil and economy of Russia?
Recall:
The Iranian Parliament approved the closure of the Strait of the Strait, through which 20% of world oil is exported.
The markets did not have time to respond to US -nuclear Iran’s nuclear objects because they were closed on weekends, however Analysts predict Significant oil growth.