Oil Prices Near Two-Week High as Geopolitical Risks Increase

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Oil prices remained near two-week highs on Monday after a 6% surge last week, driven by escalating geopolitical tensions between Western countries and major oil producers, Russia and Iran, raising concerns about potential supply disruptions.

Brent crude futures rose by 13 cents, or 0.2%, to $75.30 a barrel at 0115 GMT, while U.S. West Texas Intermediate crude futures gained 14 cents, or 0.2%, reaching $71.38 a barrel. Both contracts recorded their biggest weekly gains since late September, hitting their highest closing levels since November 7, following Russia’s hypersonic missile launch at Ukraine, which was seen as a warning to the U.S. and UK after Kyiv’s strikes on Russia using American and British weapons.

ANZ analysts, led by Daniel Hynes, noted that these recent developments marked a dangerous new phase of the war, heightening concerns about supply disruptions.

Additionally, Iran’s response to the U.N. nuclear watchdog’s resolution included activating new advanced centrifuges to enrich uranium, further escalating tensions. Commodities strategist Vivek Dhar from the Commonwealth Bank of Australia warned that if sanctions were enforced on Iran’s oil exports, it could eliminate 1 million barrels per day from global supply, or about 1% of the world’s oil production.

Iran's foreign ministry also announced plans for talks with three European countries about its controversial nuclear program on November 29.

Meanwhile, rising oil demand from China and India, the world’s largest and third-largest importers, respectively, also supported prices. China’s crude imports rebounded in November, driven by stockpiling demand due to lower prices, while Indian refiners increased their crude throughput by 3% year-on-year to 5.04 million bpd in October, supported by fuel exports.

Paraphrasing text from "Reuters" all rights reserved by the original author.