US-Iran tensions push oil prices higher
Oil prices climbed to within touching distance of a six-month high yesterday as escalating tensions between the United States and Iran heightened concerns over potential supply disruption in the Middle East.
Brent crude rose to $71.87 a barrel, recovering sharply from lows of $65 earlier this month.
The move leaves prices just shy of the $71.89 level reached at the end of January, the highest point recorded since early August.
Market analysts said renewed geopolitical risk is driving the rally.
Daniela Hathorn, senior analyst at Capital.com, said the latest developments between Washington and Tehran were “clearly feeding into prices”.
Iran, a member of OPEC, is currently the cartel’s fourth-largest producer, with output of approximately 3.2 million barrels per day.
Any sustained disruption to its production or export capacity could have significant implications for global supply balances.
Investors are also closely watching the Strait of Hormuz, a strategic shipping lane through which roughly 20 per cent of global oil supplies transit.
A closure or restriction of the waterway, even temporarily, would likely intensify upward pressure on prices.
Hathorn warned that even short-lived disruption to exports or infrastructure could push Brent crude towards $90 to $100 per barrel, particularly if markets interpret the risk as prolonged rather than temporary.
The renewed volatility underscores the sensitivity of energy markets to geopolitical developments and raises the prospect of higher fuel and input costs for businesses if tensions continue to escalate.
