US-Iran tensions cause significant increase in crude oil prices in the global market

In the international market, there is a considerable rise in the price of crude oil due to the tensions between the United States and Iran.

The global oil market is back in a state of worry over rising tensions with the US and Iran and pessimism about delivery of energy via the Strait of Hormuz. Crude oil prices rose more than three percent at the start of the Asian trading session on Monday, the main reason for which is being attributed to the fear of possible supply disruptions.

In the international market, the price of Brent crude oil rose by $2.75, or 3.12 percent, to $90.85 per barrel. At the same time, the price of US standard West Texas Intermediate (WTI) crude oil also jumped $2.56, or 3.10 percent, to $85.05 per barrel.

The geopolitical uncertainty in the Middle East has caught the investors’ attention about the potential disruption of energy supply to the world, according to the market experts. If the situation continues to get worse, more price changes in the international market could be seen, they say.

Around 20 percent of the world’s crude oil and liquefied natural gas (LNG) imports and exports travel through the Strait of Hormuz, analysts say. This essential shipping artery may have a profound impact on the global supply chain and could lead to a rise in shipping and marine insurance prices.

The situation now is adding to the uncertainty of the world’s energy market, experts say. Continued tensions or supply disruption in the Strait of Hormuz would likely lead to further increases in crude oil prices, with potential ramifications for the global economy, including fuel and transport/industrial costs.

Investors will be watching closely for signs of activity in the Middle East, energy supplies and diplomacy around the globe in the next few days, as those will be important key areas in shaping the outlook for the international oil market.