Oil Surges by 7% on Heightened Middle East Tensions
Oil prices surged by about 7% in the global commodity market on Thursday as escalating tensions between the United States and Iran stoked concerns of potential supply disruptions in the Middle East.
International benchmark Brent crude futures surged by 6.9% to $107.96 per barrel at the last look on Thursday, reflecting heightened supply risks.
US benchmark West Texas Intermediate (WTI) increased about 6.5% to $106.43 per barrel.
Regional tensions have escalated since Feb. 28, when the US and Israel launched coordinated strikes on Iran. Iran has retaliated with drone and missile strikes targeting Israel and Gulf countries that are home to US military assets.
Prices surged sharply Thursday, reversing earlier losses, as renewed fears of escalation in the US/Israel-Iran conflict reignited concerns over supply disruptions in the Middle East.
US President Donald Trump said Wednesday that the US is nearing the completion of its military objectives in Iran.
In the past four weeks, US armed forces have delivered “swift, decisive, overwhelming victories,” Trump said during an address to the nation on Operation Epic Fury.
“We’re going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Age, where they belong,” he said.
Iran has effectively disrupted traffic through the Strait of Hormuz, which carries about 20% of global oil consumption, raising fears of a historic energy shock as supply woes escalate.
Markets, already looking for signs of when the conflict might ease, were left with more uncertainty after Trump’s remarks. Instead of offering reassurance, his comments gave no clear signal that conditions in the Strait of Hormuz would return to normal anytime soon.
Trump also said that discussions with Iran are “ongoing,” but warned that without a deal major energy targets would be hit. The US is going to hit “each and every one of their electric generating plants very hard, and probably simultaneously.”
“We have not hit their oil, even though that’s the easiest target of all, because it would not give them even a small chance of survival or rebuilding. But we could hit it and it would be gone, and there’s not a thing they could do about it,” he added.
In response, Iran’s military threatened Thursday to launch “stronger, wider, and more destructive” attacks against the US and Israel, rejecting US claims that its capabilities have been significantly weakened.
A spokesperson for Iran’s Khatam al-Anbiya Central Headquarters, cited by the Fars news agency, said the war would continue until Iran’s adversaries “wither, are humiliated, regret completely, and surrender.” Zenith Bank Becomes Most Valuable Lender in Nigerian Market
