Global Oil Prices Hit Highest Levels: Oil prices jumped about 3% on Thursday, reaching levels not seen in months. Investors are worried that a possible U.S. attack on Iran, one of the world’s biggest oil producers, could disrupt global supplies. Brent crude rose $2.10 to $70.50 a barrel, while U.S. West Texas Intermediate (WTI) gained $2.09 to $65.30. This put both benchmarks into what experts call “overbought territory,” meaning prices are rising very fast and may not hold for long.
Tensions With Iran Push Prices Up
Concerns about Iran are driving much of the price surge. U.S. President Donald Trump has reportedly considered targeted strikes against Iran’s security forces and leaders, aiming to pressure the government after protests across the country. Analysts warn that if Iran reacts by attacking neighboring countries or blocking the Strait of Hormuz—a critical waterway where 20 million barrels of oil pass each day—oil prices could climb even higher.
“The immediate concern is the possible impact on global oil supplies if Iran acts,” said analyst John Evans. Iran is the third-largest producer in OPEC, behind Saudi Arabia and Iraq, making any disruption especially serious. Meanwhile, the European Union imposed new sanctions on Iran for its violent crackdown on protesters, adding more tension to the market.
Global Supply Changes Could Stabilize Prices
While tensions with Iran are pushing prices up, other global developments could help balance the market. Russia has invited Ukraine’s President Zelenskiy for peace talks, which could eventually increase Russia’s oil exports. Kazakhstan’s Tengiz oilfield is also returning to full production after recent disruptions, adding more oil to the market.
Venezuela’s crude exports are also drawing attention, with major U.S. oil companies like Exxon and Chevron working with approved sellers to buy barrels. Analysts note that when Brent crude prices rise more than WTI by about $4 per barrel, it becomes profitable for companies to ship U.S. oil overseas, which could further increase global supply.
Economic Factors Also Play a Role
A declining US dollar is impacting oil prices positively by increasing the number of purchases of dollar-denominated oil by consumers worldwide; the United States Federal Reserve has indicated its plan to keep interest rates low for an extended period of time thus potentially increasing the economy and oil demand; in the US labour market, while the number of new claims for unemployment has decreased, the sluggish pace of hiring will make many households frugal; thus, reducing total demand for energy.
Oil market participants are currently paying close attention to price changes driven by the continuing impacts of geopolitical instability along with changes in supply; if tensions escalate, analysts are forecasting that the price of Brent crude may be under $72 /bbl.
Considering all the geopolitical factors influencing price fluctuation in the market including: Iran, Russia, Kazakhstan, and Venezuela, oil prices are expected to remain volatile for several months.
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Do you see continuing increase in oil prices or declines due to diminishing global supply and greater incidence of successful peace discussions? We’d love to hear your opinion on this subject in the comments.
