Conflict Escalates, Oil Prices Surge Over 3%
Oil prices rose sharply during Wednesday's trading (July 29) following a renewed escalation of tensions in the Middle East. Brent crude climbed US$3.04, or 3.6%, to US$87.13 per barrel, while WTI rose US$2.80, or 3.5%, to US$82.06.
The surge followed strikes launched by the United States and Saudi Arabia against an Iran-backed group in Iraq. The group had been accused of carrying out drone attacks on Saudi oil facilities.
Tensions intensified further after the US military announced it had successfully thwarted an Iranian missile attack targeting American forces in the region. These developments have reignited concerns about a widening conflict.
Markets are also closely monitoring the Strait of Hormuz after Iran rejected a proposal from Oman regarding the joint management of the waterway. Tehran seeks to retain control over shipping activities in one of the world's most critical energy corridors.
Commodity vessel traffic through the Strait of Hormuz remains severely limited. Meanwhile, ship movements through the Bab el-Mandeb Strait rose to 39 vessels on Tuesday—the highest level since July 19—before dropping back to five vessels on Wednesday.
As the conflict escalates and shipments through Hormuz remain disrupted, oil prices are likely to find continued support. However, the future price trajectory will depend on military developments, the security of Saudi energy facilities, and shifts in regional shipping flows.
Source: Newsmaker.id
