Oil prices surge on escalating geopolitical tensions and supply concerns
In the early hours of Monday, oil prices in Asia soared as fears of tighter global supply intensified due to escalating conflicts in the Middle East and between Russia and Ukraine. Additionally, a decrease in the US rig count contributed to the upward pressure on prices, as reported by Reuters.
Brent and US crude futures on the rise
Brent crude futures saw a 0.6 percent increase, climbing 52 cents to reach $85.95 per barrel by 6:59 a.m. Saudi time. Similarly, US crude futures went up by 0.7 percent, gaining 55 cents to hit $81.18 per barrel.
Market impact of geopolitical tensions and US dollar strength
Despite both benchmarks experiencing a slight drop of less than 1 percent the previous week, the strengthening US dollar, which rose by about 1 percent, has limited price increases.
Analysis and insights from industry experts
Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities, highlighted the growing concerns over global oil supply due to escalating geopolitical tensions and attacks on energy facilities in Russia, Ukraine, and the Middle East.
Furthermore, the US oil rig count decreased by one to 509 last week, signaling a potential decline in future oil supply.
Recent developments in Russia, Ukraine, and the Middle East
Moscow’s recent attack on Ukraine, which included 57 missiles and drones targeting the capital Kyiv, intensified ongoing conflicts. In response, Ukraine launched attacks on Russian oil infrastructure, impacting oil refineries and fuel markets.
In the Middle East, Israeli forces besieged Gaza hospitals, leading to clashes and capturing militants. US forces also engaged with Houthi unmanned aerial vehicles in the Red Sea, highlighting the volatile situation in the region.