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Oil Surges Past USD99 as US-Iran Clash Fuels Supply Fears
(MENAFN) Oil prices surged more than 2% on Tuesday, with Brent crude edging toward the psychologically significant $100-a-barrel mark as escalating hostilities between the US and Iran stoked fears of major supply disruptions across the Middle East.
The global benchmark pushed above $99 a barrel as of 2020 GMT, extending gains as traders priced in the risk of a broader regional conflict engulfing key energy infrastructure.
The rally gathered pace after Washington and Tehran traded military strikes over the weekend, deepening a confrontation that has left markets bracing for potential disruptions to oil production and shipping routes throughout the region.
Facilities belonging to Saudi Aramco sustained fresh damage in attacks on Monday, while Iran-backed Houthi militants claimed responsibility for striking the 400,000-barrel-per-day Jazan refinery, along with other sites that supply Saudi Arabia's domestic energy market.
The US military, for its part, struck three Iranian oil tankers on Saturday, a retaliatory move that followed Iran's launch of ballistic missiles at two US Navy warships.
Compounding the uncertainty, Iran announced Monday plans to establish a new shipping corridor with Oman through the Strait of Hormuz — one of the world's most critical arteries for energy transport. Under the proposed arrangement, ships would need to coordinate directly with Tehran before entering a newly designated restricted maritime zone around the strait, a requirement that could snarl tanker traffic through the vital chokepoint and further rattle already jittery global energy markets.
The global benchmark pushed above $99 a barrel as of 2020 GMT, extending gains as traders priced in the risk of a broader regional conflict engulfing key energy infrastructure.
The rally gathered pace after Washington and Tehran traded military strikes over the weekend, deepening a confrontation that has left markets bracing for potential disruptions to oil production and shipping routes throughout the region.
Facilities belonging to Saudi Aramco sustained fresh damage in attacks on Monday, while Iran-backed Houthi militants claimed responsibility for striking the 400,000-barrel-per-day Jazan refinery, along with other sites that supply Saudi Arabia's domestic energy market.
The US military, for its part, struck three Iranian oil tankers on Saturday, a retaliatory move that followed Iran's launch of ballistic missiles at two US Navy warships.
Compounding the uncertainty, Iran announced Monday plans to establish a new shipping corridor with Oman through the Strait of Hormuz — one of the world's most critical arteries for energy transport. Under the proposed arrangement, ships would need to coordinate directly with Tehran before entering a newly designated restricted maritime zone around the strait, a requirement that could snarl tanker traffic through the vital chokepoint and further rattle already jittery global energy markets.
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