Oil Prices Surge As Conflicts Escalate And Supply Concerns Mount
Oil prices surged in Asian trading on Monday as escalating conflicts in the Middle East and between Russia and Ukraine raised concerns over tighter global supply. Brent crude futures climbed 39 cents to USD 85.82 a barrel, while US crude futures gained 40 cents to USD 81.03 per barrel.
The tensions between Russia and Ukraine intensified with Moscow launching 57 missiles and drones, targeting both Kyiv and Ukraine's energy infrastructure. Ukraine, in retaliation, had previously attacked Russian oil infrastructure, including several refineries. Additionally, Indian refineries refusing Russian crude carried on PJSC Sovcomflot tankers due to US sanctions further exacerbated the tightness in the global oil market.
In the Middle East, the situation remained volatile with Israeli forces besieging two Gaza hospitals, leading to clashes with Palestinian militants. The US also engaged Houthi unmanned aerial vehicles over the southern Red Sea after the group launched anti-ship ballistic missiles toward a Chinese-owned oil tanker. These developments added to the overall geopolitical tensions affecting oil markets.
Despite these factors driving prices higher, both Brent and US crude benchmarks had fallen less than 1 per cent the previous week, partially due to a stronger US dollar, which rose about 1 per cent during the same period. Furthermore, the decrease in the US oil rig count indicated potentially lower future supply, which added to the upward pressure on oil prices.
