BY COMFORT OGBONNA
Global oil prices climbed sharply on Thursday, extending a strong rally as the intensifying conflict involving the United States, Israel and Iran heightened fears of prolonged disruptions to critical Middle Eastern oil and gas supplies.
Benchmark Brent crude rose by $2.65, or 3.26%, reaching $83.99 per barrel by 0520 GMT. Meanwhile, West Texas Intermediate (WTI), the main U.S. crude benchmark, gained $2.76, or 3.70%, to trade at $77.42 per barrel. The gains marked the fifth consecutive session of rising prices as traders continued to react to growing geopolitical risks.
Energy markets have remained tense since the outbreak of hostilities in the Middle East. Analysts say the biggest concern is the potential disruption of energy shipments through the strategic Strait of Hormuz, one of the world’s most critical maritime chokepoints for oil and liquefied natural gas exports.
According to analysts at ANZ, crude markets remain highly sensitive to developments in the region as the risk to supply routes continues to grow. The firm noted that the escalating conflict has significantly increased uncertainty surrounding the stability of global energy flows.
Iran launched a new wave of missile attacks against Israel early Thursday, sending millions of residents across the country rushing into bomb shelters. The latest strikes came as the war entered its sixth day, only hours after efforts in Washington to halt ongoing U.S. air operations against Iran were blocked.
The situation intensified further on Wednesday when a U.S. submarine sank an Iranian naval vessel near the coast of Sri Lanka, killing at least 80 people. In another major development, NATO air defense systems intercepted and destroyed an Iranian ballistic missile that had been launched toward Turkey.
Iranian forces have also targeted commercial shipping in the region. Oil tankers traveling in or near the Strait of Hormuz have reportedly been struck, raising alarm among shipping companies and energy traders. Explosions were reported near a tanker off the coast of Kuwait, according to information released by the United Kingdom Maritime Trade Operations.
The rapidly escalating conflict coincides with political uncertainty inside Iran following the death of the country’s supreme leader, Ali Khamenei. His son, Mojtaba Khamenei, has reportedly emerged as a leading candidate to succeed him, suggesting that Iran’s leadership may maintain a firm stance despite international pressure.
The conflict has already begun to affect production and exports across the region. Iraq, the second-largest crude producer in the Organization of the Petroleum Exporting Countries (OPEC), has been forced to cut oil output by nearly 1.5 million barrels per day due to limited storage capacity and disrupted export routes, according to officials familiar with the situation.
Meanwhile, Qatar—the Gulf’s largest exporter of liquefied natural gas—declared force majeure on gas shipments on Wednesday. Industry sources say it could take at least a month for production and export volumes to return to normal levels.
Oil traders say market sentiment remains strongly bullish as there are few signs that the conflict will end quickly. With tensions escalating and shipping routes increasingly threatened, many analysts expect prices to remain volatile in the coming weeks.
The disruption has also led to a growing maritime traffic jam in the Gulf. An estimated 200 ships, including crude oil tankers, liquefied natural gas carriers and cargo vessels, are currently anchored in open waters off major energy exporters such as Saudi Arabia, Iraq and Qatar. The estimate is based on ship-tracking data from the MarineTraffic platform.
Hundreds of additional vessels remain outside the Strait of Hormuz, unable to reach regional ports due to security concerns and ongoing military activity. The narrow waterway is responsible for transporting roughly one-fifth of the world’s oil and LNG supply, making it one of the most strategically important shipping corridors on the planet.
In response to the turmoil in global energy markets, China has reportedly asked domestic companies to suspend the signing of new contracts for refined fuel exports. Officials have also urged firms to attempt to cancel shipments that have already been agreed upon, according to industry and trade sources.
With geopolitical tensions continuing to escalate and vital energy supply routes under threat, global markets are bracing for further volatility as the Middle East crisis unfolds.
Original article
Comments