Brent oil prices eased off slightly after approaching $97 per barrel at the start of Wednesday’s session and reaching their highest level since June 8, as the latest escalation in the US-Iran conflict reignited concerns over supply disruptions in the Persian Gulf. The US launched a new wave of airstrikes against Iranian targets overnight, prompting Tehran to retaliate against American military bases in the region. The escalation follows attacks on two tankers earlier this week and has coincided with a sharp reduction in shipping activity through the Strait of Hormuz, highlighting how vulnerable flows remain to renewed hostilities. Meanwhile, US crude inventories fell by 2.6 million barrels last week, while disruptions to Middle Eastern and Russian refined-product exports are keeping diesel markets exceptionally tight. Against this backdrop, and with little prospect of an imminent resolution to the conflict, the geopolitical risk premium is likely to remain elevated, leaving scope for further oil price increases.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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