Oil prices surge to $116 per barrel amid tensions with Iran

Crude Oil Prices Reach New High Amid Escalating US-Israel War on Iran

Oil prices have surged to their highest level in nearly two weeks, with Brent crude reaching $116 per barrel, a rise of over 3 percent. The increase comes as tensions between the US and Iran escalate, with Iran warning that it is prepared for a potential US ground invasion.

Iran’s parliament speaker has warned that Tehran will “set them on fire” and “punish” regional allies if US troops arrive. The conflict has deepened over the weekend, with Iranian-backed Houthis launching missiles at Israel for the first time in the war.

The escalation has led to Iran’s effective closure of the Strait of Hormuz, disrupting about one-fifth of global oil and liquified natural gas supplies. This has resulted in a significant increase in oil prices, which have risen nearly 60 percent since the start of the war.

Analysts predict that oil prices will continue to rise unless maritime traffic returns to normal levels in the strait. US President Donald Trump has threatened to “obliterate” Iran’s energy infrastructure if Tehran does not relinquish its control over the waterway by April 6.

Iran has rejected Trump’s proposed plan for ending the war, and instead proposed its own terms for a ceasefire, including war reparations and recognition of Iran’s right to control the strait. Energy experts warn that consumers are only beginning to feel the full impact of the crisis, with physical oil moves around the world in loading cycles taking several weeks to manifest.

As of 1:30 GMT, Asia’s main stock indexes have fallen sharply, with Japan’s Nikkei 225 and South Korea’s KOSPI both down more than 4 percent. The scale of the disruption has yet to be fully appreciated, with physical premiums reaching their highest levels ever.

Source: Al Jazeera