Oil prices rose sharply on Monday (June 23) following a U.S. military strike on Iran's nuclear facilities, which has increased concerns about global energy supply. Brent crude futures climbed $1.52, or 1.97%, to $78.53 a barrel, while U.S. West Texas Intermediate crude rose $1.51, or 2.04%, to $75.35. Both contracts had earlier surged over 3%, reaching five-month highs of $81.40 and $78.40, respectively, before easing slightly.
The escalation comes after U.S. President Donald Trump announced that the U.S. had "obliterated" key Iranian nuclear sites over the weekend, joining Israel in military action against Iran. This move has heightened fears of potential retaliation from Iran, which could include the closure of the Strait of Hormuz, a crucial passageway for about 20% of the world's crude oil supply.
According to The National News, Iran's parliament has reportedly approved a measure to close the strait, although such threats have not been acted upon in the past. Analysts, including Sugandha Sachdeva of SS WealthStreet, suggest that the geopolitical tensions could drive Brent prices towards $100 per barrel, with $120 becoming increasingly plausible.
The conflict, which began with Israel's attack on June 13, has already pushed Brent prices up by 13% and West Texas Intermediate by around 10%. As global tensions rise, countries like Japan and South Korea have called for de-escalation, fearing the impact on international trade.
Airlines Look At Middle East Cancellations
(Undated) -- Airlines are considering how long to cancel flights in the Middle East after the U.S. attack Iran over the weekend. The airspace was already contentious due to the ongoing exchange of missiles and strikes between Israel and Iran. The region has become especially important for commercial air routes due to Russian and Ukrainian airspace mostly closed because of war.