Conflict between Israel and Iran escalates, world oil prices increase by nearly 3%

An Iranian oil refinery. (Photo: IRNA/VNA)

World oil prices rose sharply by nearly 3% in the trading session on June 19, as the week-long air war between Israel and Iran escalated, along with uncertainty about the possibility of US involvement, making investors worried.

Brent crude oil prices rose $2.15, or 2.8%, to $78.85 a barrel, the highest close since January 22. US West Texas Intermediate (WTI) crude oil prices rose $2.06, or 2.7%, to $77.20 a barrel.

Trading activity was light during the session due to a US federal holiday.

The conflict between Israel and Iran is escalating with no sign of an exit strategy between the two sides. Meanwhile, the White House said on June 19 that President Donald Trump will decide in the next two weeks whether the United States will get involved in the Israel-Iran conflict.

That prospect has pushed crude prices higher, said analyst Rory Johnston, founder of the Commodity Context newsletter. Johnston said the market is increasingly convinced that the United States will get involved in some way in the Israel-Iran conflict.

Iran is the third largest producer in the Organization of the Petroleum Exporting Countries (OPEC), with an output of about 3.3 million barrels of crude oil per day.

About 18-21 million barrels of oil and oil products a day are shipped through the Strait of Hormuz along Iran's southern coast, and there are concerns that the fighting could disrupt trade flows.

RBC Capital investment bank analyst Helima Croft said the risk of major energy disruption would increase if Iran felt the situation was getting worse and that US involvement in the conflict could trigger direct attacks on oil tankers and energy infrastructure.

JP Morgan Bank said on June 19 that in case the conflict spreads throughout the region and causes the Strait of Hormuz to be closed, oil prices could skyrocket to $120-130 per barrel.

Even if tensions in the Middle East ease in the coming days, oil prices are unlikely to return to the low $60 a barrel levels seen a month ago, said Phil Flynn, senior analyst at financial brokerage and asset manager Price Futures Group.

Meanwhile, Russian Deputy Prime Minister Alexander Novak said at the 28th Saint Petersburg International Economic Forum that OPEC and its allies, known as OPEC+, should calmly implement their plans to increase production as demand increases in the summer, and should not worry the market with forecasts.

Source: https://baobinhphuoc.com.vn/news/4/174232/conflict-between-israel-and-iran-climbs-up-the-world-oil-price-increases-nearly-3