DHAKA — Global oil prices climbed to their highest level in six weeks on Wednesday as the prolonged war between the United States and Iran raised concerns over further disruptions to crude supplies from the Middle East.
Brent crude, the international benchmark, briefly rose to $100.19 a barrel before easing slightly. At around 8:02 a.m. GMT, Brent was trading at $99.93 a barrel, while US benchmark West Texas Intermediate (WTI) stood at $94.52 a barrel, according to Reuters.
The latest surge follows months of escalating tensions between Washington and Tehran. The conflict began on February 28, while a 60-day ceasefire agreement, known as the Islamabad Memorandum of Understanding, was announced on June 17. Iran withdrew from the agreement on July 13, well before its scheduled expiration on August 18.
With the agreement no longer in effect, tensions between the two countries intensified, putting additional pressure on energy markets. Crude prices began rising steadily during the final week of August as traders increasingly priced in the risk of supply disruptions.
Hamad Hossain, an economist specializing in climate and commodities at Capital Economics, told Reuters that the rise in oil prices was driven primarily by the prolonged conflict and its impact on Middle Eastern oil supplies.
He said prices were unlikely to decline significantly unless there was an improvement in the security situation.
Jeffrey Currie, co-chairman of Abex Markets, said the market appeared to be treating the latest increase as a temporary development, but warned that the underlying problem was more structural.
He described the additional cost associated with heightened geopolitical risks as a “security premium”, suggesting that it could increase further if the conflict continues.
The surge in crude prices is likely to add to concerns over inflation and energy costs in oil-importing economies, particularly if disruptions to regional supplies persist.
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