Escalating tensions in Middle East drive up oil prices

Tensions in the Middle East are heightening concerns among oil market participants, RBC Capital Markets LLC reports. Previously, traders feared an oversupply, but now they are alarmed by the potential loss of up to 90% of Iranian oil exports. The risk of disruptions in crude supplies has led to higher prices. As a result, benchmark Brent crude posted its strongest daily price increase in three years at the end of last week. On Monday, prices attempted to extend gains, Bloomberg notes.

The Middle East crisis has prompted global banks to analyze a wide range of possible scenarios, including the likelihood of oil supply disruptions through the Strait of Hormuz.

Market participants are currently focused on further developments in the region. The threat of Iranian energy exports being cut—and the potential implementation of such a scenario—is expected to support both demand and price growth, the news agency concludes, citing RBC analysts.