A fresh wave of airstrikes across West Asia set the oil market alight again on Monday, driving crude prices sharply higher through the day as traders braced for supply disruptions. WTI Crude pushed past $84 a barrel, while Brent Crude broke above the $90 mark. During trade, WTI firmed by roughly 2 percent and Brent gained more than 2 percent.
The single biggest driver behind the surge is the deepening standoff between the United States and Iran. The fear that oil supply from the Middle East could be choked off is dominating sentiment, and any hitch in supply feeds straight through to prices.
Crude up nearly 30% from its July lows
According to Ajay Kedia, Director of Kedia Advisory, crude prices have already climbed about 30 percent from the lows they touched in July. The main reason, he explained, is that the interim peace agreement between the United States and Iran has fallen apart. As the situation soured, the US reimposed a blockade on Iranian ports and strikes near the Strait of Hormuz picked up pace. That is why the rally that began last week flared up even further on Monday.
Iran declares the ceasefire over
Kedia said Iran has announced the end of its ceasefire with the United States. Tehran claims that four ships passing through the Strait of Hormuz were stopped over the weekend. The confrontation between the two nations is no longer confined to military targets; it has now spread to bridges, utility services and port facilities. Kuwait Petroleum Corp has confirmed that one of its oil facilities was hit in an Iranian attack on Saturday.
Worry spreads around the world
The latest spike in oil prices has rattled markets across the globe. Analysts warn that if this pace does not slow soon, inflationary pressures could come roaring back. Costlier oil does not stop at petrol and diesel pumps; it ripples through transport, freight and the price of everyday goods. That is precisely the fear now unsettling the global economy, with investors keeping a close watch on how the situation in West Asia unfolds.
