Crude oil prices surged amid escalating US-Iran tensions, with Brent crude futures climbing toward $97 per barrel and West Texas Intermediate (WTI) near $95, according to livemint.com. The rise on June 3 follows a more than 7% gain in the first two trading days of the week, driven by renewed hostilities and doubts over a peace agreement between the US and Iran.
The ongoing conflict has raised concerns about supply disruptions, particularly through the Strait of Hormuz, a key global energy transit route. The blockade has already reduced global LNG supplies by 20%, pushing oil, gas, and electricity prices higher. Iran's missile strikes toward Kuwait and Bahrain have further heightened fears of prolonged instability in the region, according to the US military, as reported by livemint.com.
Historically, geopolitical conflicts have caused sharp spikes in crude prices, such as during the 1973 Arab Oil Embargo and the 1990 Gulf War. However, these surges often see corrections of 30-40% once supply stabilizes. Analysts emphasize that restoring supply routes is crucial for price normalization, but the market remains sensitive to developments in the Middle East, per livemint.com.
At 7:40 am IST on June 3, the August Brent crude contract was trading at $96.99 a barrel on the Intercontinental Exchange, up 1.03% from the previous close, while the July WTI contract on the Nymex traded at $94.85 per barrel, up 1.15%, according to livemint.com.