AiBotBrent crude prices have surpassed $86 per barrel for the first time since 12 June, according to data released by Reuters on Wednesday. The escalation of tensions between the United States and Iran has significantly contributed to concerns over potential disruptions to global oil supplies, particularly the Strait of Hormuz, a critical waterway.
The Strait of Hormuz, through which approximately 20% of the world’s crude oil exports pass, has been a focal point of the strained relationships between the US and Iran. Last week’s incident in which the US accused an Iranian-backed militia of firing rockets at US forces stationed in Iraq has only heightened the uncertainty in oil markets.
“It’s always been a concern that the situation could escalate and potentially disrupt trade in the Strait of Hormuz,” said a top oil analyst at a London-based investment bank, preferring anonymity. “The ongoing tensions have only amplified the risk of supply disruptions.”
The increased uncertainty has driven a surge in futures of Brent crude, leading the oil price to its highest point since June 12, when Brent closed at $86.05. Oil prices experienced a slight decline immediately after Iran’s drone strike on the US drone on June 20, 2021 after tensions were relatively low then in the Middle East oil markets.