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On Monday, 23 June, oil prices reached their highest level since January amid concerns about supply following US air strikes on Iranian nuclear facilities.
According to Reuters, Brent crude oil futures rose by $1.52, or 1.97%, to $78.53 per barrel. US WTI – by $1.51, or 2.04%, to $75.35. At their peak, prices rose by more than 3% to $81.40 and $78.40, respectively, a five-month high.
The rise in prices followed US President Donald Trump’s statement that US strikes had “destroyed” Iran’s key nuclear facilities. Tehran promises to retaliate.
Iran is the third largest crude oil producer in OPEC. Fears of a blockade of the Strait of Hormuz, through which a fifth of global oil supplies pass, have only increased market tensions.
“The current geopolitical escalation is a fundamental catalyst for oil prices to rise… $100 for Brent is likely, and $120 is looking increasingly realistic,” said Sugandha Sachdeva, an analyst at SS WealthStreet.
The Iranian parliament has already approved a decision on the possible closure of the strait, although such threats have not been implemented in the past.
According to Goldman Sachs, if transit through the Strait of Hormuz is cut in half, Brent could temporarily rise to $110 per barrel.
Since the conflict escalated on 13 June, the price of Brent has risen by 13% and WTI by about 10%.
