Oil surges 16% amid escalating tensions between the US and Iran
Oil prices rose by more than 4% in Friday trading, hitting their highest levels in over a month, as the United States and Iran intensified their attacks across the Gulf region. This renewed disruptions to oil flows throu
Translated by Qiyas from النهار — Original source
Oil prices rose by more than 4% in Friday trading, hitting their highest levels in over a month, as the United States and Iran intensified their attacks across the Gulf region. This renewed disruptions to oil flows through the Strait of Hormuz and introduced a new threat to shipping traffic through the Bab al-Mandab strait in the Red Sea. Brent crude futures rose $3.87, or 4.59%, to settle at $88.10 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained $3.54, or 4.48%, to $82.49 per barrel. Both benchmarks recorded their highest levels since mid-June. The two crude grades have risen by approximately 16% this week, with Brent on track for a third consecutive weekly gain and WTI for a second.
Tensions between the United States and Iran escalated as Washington bombed bridges and an airport in Iran, while Tehran targeted a power generation and desalination plant in Kuwait. The collapse of a temporary ceasefire agreement between the two countries led to a sharp decline in oil flows through the strait, which previously carried about 20% of global oil supplies before the outbreak of hostilities. Iran pressured the Yemeni Houthi group to close the Bab al-Mandab strait at the entrance to the Red Sea if Washington continued bombing Iran’s electricity grid infrastructure.
Hedge funds have rapidly increased their bets on rising Brent prices at the fastest pace in nearly a decade, amid escalating confrontations between Iran and the United States and diminishing expectations for a stable return of navigation through the Strait of Hormuz. Data from ICE Futures Europe showed that fund managers increased their long positions in Brent crude by approximately 76,000 contracts, bringing total positions to 357,000 contracts for the week ending July 14, marking the largest weekly increase since December 2016. This shift came just one week after investment positions had fallen to their lowest levels in seven months. Brent crude rose by about 16% last week, securing a third consecutive weekly gain.
