Oil prices continue to rise over escalating Israel-Iran conflict

Brent crude prices have risen by almost 5% amid fears that the hostilities could disrupt a key shipping route

RT: FILE PHOTO. ©  Global Look Press / Werner Otto

Global oil prices jumped by almost 5% amid the continued military escalation between Israel and Iran, and US President Donald Trump’s demand for an unconditional and immediate surrender from Tehran.

Brent crude oil prices increased by 4.4% to reach $76.45 per barrel on Tuesday, and by over 10% since Israel launched its first missiles against Iran last week.

According to ABC, the latest spike was sparked by a series of posts made by Trump on Truth Social, in which he called Iranian Supreme Leader Ayatollah Ali Khamenei an “easy target” and claimed that the US and its allies are in “complete and total control” over Iranian airspace.

“The market is largely worried about disruption through [the Strait of] Hormuz,” Saxo Bank analyst Ole Hansen said, while personally assessing the risk as very low.

The Strait of Hormuz is a critical maritime passage through which around 20% of the world’s oil supply flows. The north coast of the strait is Iranian territory. On Saturday, Iranian MP and Islamic Revolutionary Guard Corps commander Esmail Kousari stated that Tehran is seriously considering closing the strait to shipping. Iraqi Foreign Minister Fuad Hussein warned that oil prices could surge to $200 to $300 per barrel if “military operations were to break out” in the area.

Two oil tankers collided in the strait on Tuesday, catching fire but causing no injuries or spillage. The United Arab Emirates Coast Guard said it had evacuated 24 people from one of the ships, the Adalynn. The crew of the second tanker, the Front Eagle, reported that a fire on its deck was extinguished.

British maritime security monitor Ambrey deemed the collision an accident unrelated to regional tensions. However, Reuters mentioned “increased electronic interference” caused by the conflict between Israel and Iran in connection with the incident.

Israel launched a series of airstrikes against Iran on Friday, saying it is seeking to prevent Tehran from acquiring nuclear weapons. Tehran responded with a missile barrage of its own, and the two nations have been exchanging strikes ever since.