Crude oil prices have surged as hopes for a renewed peace deal between the U.S. and Iran fade, with Brent crude futures rising to $93.82 a barrel on August 21. The escalation of the U.S.-Israeli conflict with Iran has raised concerns about potential disruptions in oil supplies from key producers in the Middle East.
Brent crude futures increased by 4 cents to $93.82 a barrel after a more than 2% gain in the previous session, while U.S. West Texas Intermediate (WTI) crude futures fell by 6 cents to $86.78 a barrel, following a 2.3% rise earlier. Over the past five days, Brent has gained over 7%, and WTI has risen more than 8%, reaching their highest levels since July 24.
The ongoing conflict has heightened fears of supply disruptions from major oil producers such as Saudi Arabia, Iraq, the UAE, and Kuwait. The United Arab Emirates has suspended all financial and economic transactions with Iran, further straining ties with Tehran.
The Strait of Hormuz, a critical oil transit route, remains a focal point of concern. Shipping traffic through the strait on Wednesday was unchanged from the previous day, with nine vessels transiting, significantly below pre-war levels when shipments accounted for about one-fifth of global consumption.
JPMorgan estimates that each additional month of disruption could add $7 to $8 per barrel to Brent prices, potentially reaching $114 a barrel if the situation persists for three months. Goldman Sachs has warned that Brent could rise to $120 a barrel if disruptions continue.
Background
The conflict between the U.S. and Iran, which began on February 28 with military strikes, has led to significant disruptions in global oil and gas flows. The blockade of the Strait of Hormuz by Iran and attacks on energy facilities have exacerbated the situation, affecting global energy markets.
As tensions in the Middle East continue to escalate, the global oil market remains on edge. Analysts suggest monitoring the situation closely, as prolonged disruptions could lead to further price increases and impact global energy markets.
