Wednesday saw a 2% increase in oil prices to a one-week high as concerns about Middle Eastern supply disruptions were rekindled by the beginning of hostilities between the United States and Iran. At 10:33 a.m. EDT (1433 GMT), Brent futures increased $1.55, or 1.7%, to $92.04 per barrel. West Texas Intermediate (WTI) crude in the United States increased $1.84, or 2.2%, to $87.60.
As a result, WTI is expected to close at its highest level since August 20 and Brent is expected to close at its highest level since August 24. Iran declared on Tuesday that if the United States fulfilled its obligations under a June temporary agreement to end their conflict, it would do the same. Following U.S. President Donald Trump’s warning of more strikes against Tehran, tensions remained high.
Following reports of two tankers being fired upon as they left the Strait of Hormuz, the international oil supply channel that Iran has essentially blocked to shipping, and the first direct attack exchange between the United States and Iran since late July, oil prices increased on Monday.
Prior to the US attack on Iran’s Larak Island on Sunday, the six-month-old dispute had turned into an economic standoff. Iran retaliated by firing missiles at two US air bases in Jordan overnight. According to Saxo Bank analyst Ole Hansen, “new hostilities between the United States and Iran raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz.
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