Oil hits five-month high amid fears US will renew strikes on Iran
Oil has reached its highest level in over five months as fears of escalating Middle East conflict drive energy markets higher, with Brent crude rising to $114.72 a barrel.
The increase came after Tehran threatened to strike oil facilities, undersea cables, datacentres and AI facilities in the Gulf region if a new US-Israeli attack was launched against Iran. Oil had traded at about $72 a barrel back in February before the Iran war began but soared to $126 a barrel by the end of April.
Rising tensions
Tensions in the region have been escalating this week, with Iran's Islamic Revolutionary Guards Corps claiming to have struck four commercial ships in the Strait of Hormuz on Wednesday. The US State Department ordered some diplomats and families of US government employees to leave Saudi Arabia, which has faced continued attacks from Houthi rebels in Yemen.
Widespread reports that the US is considering renewed military strikes on Iran after the midterm elections rather than pursuing a diplomatic route was enough for the price to pop, after what many had considered would be a brief conflict is now in its eighth month.
Supply concerns
Susannah Streeter, chief investment strategist at Wealth Club, said fears were rising that American and Israeli forces would be ordered to launch strikes on Iran's energy infrastructure after the US elections on November 3. She noted that attacks on Saudi Arabia's facilities by Houthi rebels have intensified this week, making the journey through the Strait of Hormuz dangerous.
Streeter added that Ukraine's bombardment of Russian diesel refineries was also contributing to supply concerns in the oil markets.
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