Oil prices breached $95 a barrel as escalating Middle East conflict and US-Iran aggression threaten global supply chains.
The price of oil rose sharply on Wednesday, surpassing the $95 a barrel mark for the first time in six weeks. This surge follows renewed aggression between the US and Iran over the strait of Hormuz, combined with threats from Houthi forces to target vessels in the Bab el-Mandeb strait. The benchmark price reached $95.24 before easing slightly, marking the fastest increase since March. The administration warned that strikes on Iran would intensify, contributing to a conflict that has cost the US $37.5bn. Analysts at Goldman Sachs suggest prices could reach $120 a barrel by year-end if exports via Hormuz do not resume. While emergency oil releases and increased exports from the Americas have cushioned the market, Fatih Birol of the IEA warned that global energy security remains at risk. Birol noted that while crude deliveries have been steady, markets for refined products like diesel and gasoline remain tight. Norway’s state oil company Equinor reported that profits nearly doubled to $11.5bn in the three months ending in June due to these rising prices.