Brent Rises to Near Six-Month High, Market Wary of Iran
Brent oil prices surged on Thursday (January 29th) and approached a nearly six-month high, fueled by market concerns about a possible US military strike on Iran. Iran is the fourth-largest producer in OPEC with production of around 3.2 million barrels per day, so any escalation immediately triggers a “risk premium” in oil prices.
Brent rose $2.61 (3.8%) to $71.01/barrel at 14:04 GMT, its highest level since August 1st. With this rally, Brent is on track to gain more than 16% for January, potentially its biggest monthly gain in four years. Meanwhile, WTI rose $2.54 (4%) to $65.75/barrel, after briefly touching $65.80—a four-month high—and is on track to gain around 14% for January.
Markets are primarily concerned not just about Iran, but its ripple effects: if the conflict escalates, Iran could attack its neighbors or the most dreaded scenario—disruption of shipping in the Strait of Hormuz, a narrow waterway through which some 20 million barrels of oil pass daily. President Donald Trump has increased pressure on Tehran to end its nuclear program, threatening attacks and the arrival of a US warship group in the region.
Meanwhile, reports that Trump is considering options, including limited strikes against Iranian security targets and leaders, have prompted some analysts to raise their price projections if tensions continue to escalate. (yds)
Source: FXstreet.com
