Escalating Iran Conflict Triggers Global Oil Price Surge
World oil prices have strengthened again amid escalating tensions in the Middle East. This increase occurred after the Iran-backed Houthi group in Yemen launched a missile attack on Israel and declared it would continue its operations as long as attacks on Iran and its proxies continued. This situation has increased market concerns that a widening conflict could disrupt global energy supplies.
Brent crude briefly surged 3.7% to US$116.75 per barrel, while West Texas Intermediate (WTI) surged past US$100 per barrel before paring some of its gains. This increase extended the oil price surge throughout March, during which Brent had surged around 60% in a single month. The market now perceives geopolitical risks as increasing, especially as the conflict has entered its fifth week with no signs of abating.
Concerns have intensified after the United States deployed thousands of additional troops to the region. This move has fueled speculation about the possibility of a larger military operation. At the same time, President Donald Trump's statements alleging a desire to control Iran's oil and the possibility of taking over the export hub of Kharg Island have further fueled the situation. If such a move is actually taken, the market believes a strong response from Tehran is highly likely.
One of the market's main concerns right now is the disruption in the Strait of Hormuz, a vital waterway connecting the Persian Gulf to global markets. Iran has reportedly tightened control over this waterway and is only allowing a limited number of small vessels to pass through. This situation has heightened concerns about oil supplies, as the Strait of Hormuz is one of the world's most vital energy distribution routes.
The Houthi movement's entry into the conflict also creates additional risks for the oil market. This group has previously disrupted shipping lanes in the Red Sea, forcing ships to seek alternative routes. The market is now beginning to assess the potential for threats to Saudi Arabia's oil infrastructure, including the export route through Yanbu. If the disruption spreads to the region, the pressure on global energy supplies could be significantly greater.
Amidst these conditions, the market is starting to factor in the potential for further oil price increases in the near term. Some analysts believe oil prices could still move towards US$120 per barrel if the conflict continues and key distribution routes remain disrupted. The surge in energy prices is also starting to impact various other sectors, including transportation costs, the metals industry, and global inflation. Thus, the development of war in the Middle East is now not only a geopolitical issue, but also the main factor driving the world energy market. (asd)
Source: Newsmaker.id
