Oil prices surge 12pc in a week amid escalating US-Iran conflict
Crude oil prices in the global market have climbed further as military exchanges between the United States and Iran in the Gulf region have intensified. Following the collapse of a fragile ceasefire, oil shipments through the Strait of Hormuz have nearly come to a halt.
Adding to supply concerns, Tehran has reportedly instructed its allied Houthi rebels to prepare to block the Bab al-Mandeb Strait, a key oil export route through the Red Sea. The development has heightened fears of a major global energy security crisis.
As of 7:18 a.m. Bangladesh time on Friday (July 17), the international benchmark Brent crude rose by $1.05, or about 1.25%, to $85.28 per barrel.
Meanwhile, West Texas Intermediate (WTI), the U.S. benchmark crude, gained $1.03, or 1.3%, to reach $79.98 per barrel.
Both benchmark crude prices have surged by nearly 12% over the past week. Brent crude has now posted gains for a third consecutive week, while WTI has extended its rally for a second straight week.
Speaking at an event hosted by the Council on Foreign Relations in Washington, International Energy Agency (IEA) Executive Director Fatih Birol warned that global energy security remains highly fragile.
"Oil security, or global energy security, remains an extremely sensitive and critical issue. If the situation in the Middle East does not improve within the next few weeks, we could face a major crisis. I am deeply concerned about the current situation," Birol said.
Market concerns over oil supplies intensified further following a Reuters report citing three reliable sources. According to the report, Iran's top leadership has instructed Yemen's Houthi rebels to completely block the Red Sea's main oil shipping route if U.S. President Donald Trump orders strikes on Iran's domestic electricity infrastructure.
Analysts at market research firm IG said that, from a technical perspective, if WTI crude remains above its key support level in the mid-$70 range, prices could easily climb into the mid-$80s in the near term.
The latest escalation comes after a ceasefire established last month under a memorandum of understanding collapsed. For the first time since the truce broke down, the United States carried out two major waves of airstrikes in a single day, primarily targeting military installations near Iran's southern coastline.
In a statement, the U.S. Central Command (CENTCOM) said American forces have continued airstrikes for a sixth consecutive night with the objective of severely degrading Iran's military capabilities and its ability to conduct attacks. The latest strikes began at 12:00 a.m. Bangladesh time (9:30 p.m. Tehran time).
Iran, however, responded swiftly by launching waves of missiles and drones targeting U.S. military bases across neighboring countries, including a recently expanded American airbase in Jordan.