Oil prices surged to $84 per barrel on Tuesday, marking an 8% increase as markets grappled with the prolonged conflict in the Middle East and the looming threat of supply disruptions. The international benchmark, Brent Crude, soared by 8.36% to reach $84.24, while the U.S. benchmark, WTI Crude, breached the $75 per barrel mark, trading at $76.93, up 8% for the day. This upward trajectory followed a 10% jump on Monday, triggered by U.S. President Donald Trump's statement that the war in Iran, dubbed 'Epic Fury', might extend beyond the initial four-week projection. Trump emphasized their capability to sustain the operation for a longer duration, stating, 'Whatever it takes... Right from the beginning, we projected four to five weeks, but we have the capability to go far longer than that.'
In response to the U.S.-Israeli strikes, Iran took a defiant stance, claiming to have closed the Strait of Hormuz and vowing to burn any ship attempting to transit the narrow lane between Iran and Oman, a critical route for a fifth of global oil and gas trade. Ebrahim Jabbari, a senior advisor to the Commander-in-Chief of the Islamic Revolutionary Guard Corps (IRGC), echoed these sentiments, stating, 'The Strait is closed. If anyone tries to pass, the heroes of the Revolutionary Guard and the regular navy will set those ships ablaze.' However, the U.S. Central Command refutes the closure, and tanker traffic remains effectively halted, as no shipper, trader, or oil company is willing to challenge Iran's threats.
Analysts predict that oil prices could soar to $100 or even $120 per barrel if the Strait's traffic is not normalized within three weeks. This volatile situation underscores the delicate balance of global energy markets and the potential for further price spikes, highlighting the importance of monitoring geopolitical developments in the Middle East.
