Oil Prices Are Rising on Global Markets: The Main Reasons
17 July 14:37
Oil prices are rising on Friday, July 17, amid ongoing military operations in the Middle East, ending the week with a sharp increase. This is reported by "Komersant Ukrainian", citing “Interfax-Ukraine.”
The U.S. Central Command (CENTCOM) announced another series of strikes against Iran, specifically targeting coastal reconnaissance facilities, air defense systems, and military logistical infrastructure.
In response, the Iranian military attacked a U.S. airbase in Bahrain using drones. Kuwaiti authorities also reported that they had repelled the Iranian strikes.
The price of September Brent crude futures on the London ICE Futures exchange stands at $84.95 per barrel, which is $0.72 (0.85%) higher than at the close of the previous trading session. On Thursday, they fell by $0.72 (0.85%) to $84.23 per barrel.
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WTI crude oil futures for August delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have risen by $0.78 (0.99%) to $79.73 per barrel. At the close of the previous session, their price had fallen by $0.65 (0.82%) to $78.95 per barrel.
This week, both Brent and WTI have risen by nearly 12%. The breach of the ceasefire between the U.S. and Iran has once again restricted oil supplies through the Strait of Hormuz.
The closure of the Bab el-Mandeb Strait poses a serious additional threat to energy supplies from the Middle East. According to Kpler, daily oil shipments via this route in June totaled about 7.4 million barrels per day, or about 7% of global production.
“The potential threat of disruptions to oil shipments through the Red Sea further complicates the problem,” notes KCM Trade market analyst Tim Wotter.
This “double-risk” scenario for oil shipments from the Middle East will help sustain the premium in oil prices.
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