Prices of Crude Oil Increase as Middle East Tensions Spread
Crude oil prices surged early on Monday amid concerns about rising supply risks as the war in the Middle East spread across the region. The US-Iran war could be prolonged after the 15-point peace proposal by Washington was rejected by Tehran, with a counterproposal last week.
In addition, supply risk is anticipated to persist as Iran-backed Houthis in Yemen launched attacks targeting Israel. A month of conflict in Iran is starting to exact a serious toll on markets.
On Friday, the S&P 500 and the Nasdaq closed at their lowest levels since August. The Nasdaq has now fallen into correction territory, down 10% from its peak.
International benchmark Brent crude futures traded at $108.56 per barrel on Monday, up 3% from the previous close of $105.32. US benchmark West Texas Intermediate (WTI) increased about 2.1% to $101.75 per barrel, compared with $99.64 in the previous session.
Houthi military spokesman Yahya Saree announced Saturday that the group had targeted Israel for the first time since the outbreak of the current US-Israeli war against Iran.
“We carried out our first military operation by targeting sensitive Israeli military sites in southern occupied Palestine with ballistic missiles,” Saree said.
Later, Saree announced that they carried out a “second military operation” targeting southern Israel. He stressed that the attack was conducted simultaneously with strikes carried out by Iran and Hezbollah in Lebanon was successful.
“As previously stated, Iran and Lebanon will continue their operations in support of resistance fronts in Iraq and Palestine until their direct military intervention objectives are achieved and attacks against all resistance fronts are halted,” he added.
Rising security threats in the Red Sea and the perception of coordinated action among Iran-linked actors have pushed up market risk premiums, reinforcing upward pressure on prices and prompting investors to reprice potential scenarios involving the Strait of Hormuz.
Additionally, threats by US President Donald Trump to seize Iran’s main oil export terminal on Kharg Island have supported the upward trend in prices.
Speaking on March 29, Trump said that at a time when the US is increasing its military presence in the Middle East, Washington would “prefer to take” Iran’s oil, signalling the possibility of seizing Kharg Island. Nigerian Treasury Bills Yield Dips as CBN Reprices Rates
