NEW YORK/LONDON: Global oil prices surged more than 6 percent on Wednesday, reaching their highest levels in weeks as growing tensions between the United States and Iran intensified fears of prolonged disruptions to Middle East oil supplies.
Brent Crude futures for June delivery jumped $7.07, or 6.4 percent, to $118.33 per barrel, marking the highest level since March 31. Meanwhile, West Texas Intermediate crude futures climbed $6.34, or 6.3 percent, to $105.19 per barrel, the strongest level since April 13.
Market analysts said stalled US-Iran negotiations and concerns over a possible long-term blockade of Iranian ports are driving uncertainty in the global energy market. A White House official revealed that US President Donald Trump had consulted American oil companies on ways to reduce the impact of a prolonged blockade affecting Iranian oil exports.
According to Reuters estimates, more than $50 billion worth of global crude oil supply has already been affected since the beginning of the Iran conflict. Investors fear the situation could worsen if tensions continue to escalate in the Gulf region.
Analysts noted that supply pressures are also increasing in the United States. Fresh data from the Energy Information Administration showed that US crude inventories fell by more than 6 million barrels last week, significantly higher than market expectations of around 200,000 barrels.
Meanwhile, the closure of the Strait of Hormuz continues to disrupt shipping routes. Reports indicate that Abu Dhabi National Oil Company has informed customers that some crude shipments may be loaded outside the Gulf region due to ongoing security concerns.
Investors are also monitoring the United Arab Emirates’ decision to leave OPEC, though experts believe the move is unlikely to have an immediate impact on production levels.
Energy experts warn that continued geopolitical tensions in the Middle East could keep oil prices volatile in the coming weeks, increasing concerns over inflation, fuel prices, and global economic stability.
