Oil prices hit $90 per barrel again: What's the reason?
What's the story
Oil prices surged by 3% today, with Brent crude futures crossing the $90 mark per barrel. The spike comes as tensions between the United States and Iran have intensified in the Middle East, disrupting energy shipments through the Strait of Hormuz. Brent crude futures rose by $2.69, or 3%, to $90.79 per barrel, their highest since June 11.
Escalation
US intensifies airstrikes on Iran
The US has conducted a ninth consecutive night of airstrikes against Iran, targeting its military capabilities allegedly used to attack commercial ships and civilian sailors.
Meanwhile, Iran's Navy claimed it intercepted four unidentified vessels trying to cross the Strait of Hormuz via an "unsafe route" after ignoring repeated warnings.
Two were reportedly disabled in accidents while the other two turned back.
Supply concerns
Concerns over global oil supply disruptions
The escalating conflict has raised fears of global oil supply disruptions.
JPMorgan Chase & Co. has warned that global oil inventories outside China are at record lows, leaving the market with little room for any supply shock.
This situation is further complicated by Iran-backed Houthi militants in Yemen disrupting commercial shipping through the Red Sea amid heightened regional tensions.
Transportation disruptions
Impact on Persian Gulf oil transport
The ongoing conflict has also impacted the "shuttle run" operations used by Persian Gulf oil producers to transport crude cargoes.
The US has resumed efforts to restrict movement through the Strait of Hormuz, while Iran's attacks on vessels in and around this strategic waterway have further complicated matters.
A vessel was reported burning northwest of Oman's Kumzar this morning, according to the United Kingdom Maritime Trade Operations agency.