Global oil markets faced significant turbulence today as Iran launched a missile strike against Israel, causing crude oil prices to spike dramatically.
This unexpected military action has heightened concerns about potential supply disruptions in the Middle East.
Brent crude futures rose 1.6% to $74.75 per barrel, while West Texas Intermediate (WTI) increased by 1.7% to $70.98.
The strike led to a notable 3.8% rise in Brent crude, marking the largest intra-day fluctuation since April 2023.
The missile strike has escalated existing tensions in the region, reportedly in retaliation for the killing of Hezbollah leader Sayyed Hassan Nasrallah by Israel.
This escalation raises fears of further conflict, which could significantly impact oil production and transportation.
As a major oil producer and key OPEC member, any disruption to Iran’s output or threats to vital shipping routes could have serious implications for global oil supply.
Iran’s production reached a six-year high of 3.7 million barrels per day in August.
Rising oil prices are likely to contribute to inflationary pressures worldwide, affecting consumer spending and economic growth.
In the US, experts predict that drivers could see an increase of 10 to 15 cents per gallon at the pump.
The international community is closely monitoring the situation, with calls for de-escalation. The UN Security Council is set to meet to discuss the crisis, while US President Joe Biden has reaffirmed support for Israel, warning of consequences for Iran’s actions.
As developments unfold, analysts will be watching the long-term impacts on global oil markets and geopolitical stability in the region.
