Brent Oil Prices Rise As Iran-U.S. Tensions Escalate
Hovered at $92.27 a barrel Thursday morning after a sharp jump tied to Middle East tensions. Traders are watching how the conflict affects supply, shipping and…
JAKARTA — The brent oil price stood at $92.27 per barrel at 6:45 a.m. Eastern Time on Thursday, down 38 cents from Wednesday morning but still about $19.67 higher than a year ago, according to Fortune.
The move comes after crude prices surged when President Donald Trump said the U.S. would hit Iran hard in retaliation for an attempted surprise attack on American forces in the Middle East. CNBC reported that Brent crude futures, the international benchmark, gained 7.9% to close at $90.74 a barrel on Wednesday.
What is driving the brent oil price
Markets have been reacting to the back-and-forth in the conflict. CNBC said Iran’s Islamic Revolutionary Guard Corps launched ballistic missiles at U.S. forces, and Central Command said the missiles were successfully intercepted. The attack followed a brief pause in fighting that had pushed oil lower on hopes the ceasefire would resume.
Trump told Fox News that Iran "is going to get a beating" after its Revolutionary Guard launched ballistic missiles at U.S. forces. "We'll be hitting them hard," the president said. CNBC also reported that Iran targeted a U.S. base in Jordan, according to Axios.
For traders, the key issue is not only the latest strike, but what it means for supply routes and shipping through the Middle East. Brent remains the benchmark most global markets watch when they gauge the cost of crude outside the U.S. That makes every sharp swing in the brent oil price relevant far beyond the energy desk.
Why the move matters
The effect can filter through to fuel costs. Fortune noted that gas prices at the pump do not only track crude oil, since refineries, transportation, taxes and local markups also shape the final price. Still, crude often makes up a majority of the per-gallon cost, so a jump in oil can feed into what consumers pay.
Fortune also said the U.S. Strategic Petroleum Reserve can help soften price spikes during supply shocks, though it is meant for temporary relief rather than a long-term fix. That matters when geopolitics drives the market more than ordinary demand trends.
One market strategist did not sound convinced the calm will last. "We remain exceedingly skeptical that we are on the brink of a major diplomatic breakthrough that will resolve the nuclear standoff that started the war five months ago or enable the normalization of maritime traffic," Helima Croft, head of commodity strategy at RBC Capital Markets, said in a note to clients Tuesday.
That skepticism is part of why the brent oil price remains sensitive to every headline from the region. Iran-allied militias in Iraq also launched drones at oil facilities in Saudi Arabia’s Riyadh and Eastern regions, according to the state-run Saudi Press Agency, while U.S. and Saudi warplanes launched joint strikes in retaliation, CNBC reported. Iran’s Houthi allies in Yemen said Monday that they targeted Saudi pipeline infrastructure that transports oil, adding another layer of risk for energy markets.
For now, the market is still trading on fear. And that keeps Brent elevated.
