Oil Prices Surge Amid Middle East Tensions: Geopolitical Drama Unfolds

Oil prices soared to their highest since January as the U.S. joined Israel in strikes against Iran, sparking supply concerns. Prices later dipped, showing volatility. With no immediate supply disruption, the market weighs geopolitical risks. Tensions around the Strait of Hormuz add to the uncertainty and potential for price spikes.

Oil prices have reached their highest levels since January following a dramatic escalation in Middle Eastern tensions as the United States joined Israel in launching strikes against Iran's nuclear facilities. Brent crude futures rose slightly by 8 cents, trading at $77.09 per barrel, while West Texas Intermediate crude inched up by 3 cents to $73.87.

Price volatility marked Monday's trading session as both Brent and WTI touched new five-month highs before reversing gains. Since the conflict's onset on June 13, Brent has surged 11%, while WTI saw a 9% increase. Despite no current supply disruptions, investors remain cautious over geopolitical risks affecting oil markets, suggests UBS analyst Giovanni Staunovo.

Tensions have heightened following U.S. President Donald Trump's declaration of 'obliterating' Iran's nuclear sites, with Iran promising to defend itself and targeting U.S. actions as unjustified. Analysts are closely monitoring the Strait of Hormuz, a key oil shipping route, amid fears of Iranian retaliation. According to Saxo Bank analyst Ole Hansen, even the threat of disruption could influence short-term price spikes.

(With inputs from agencies.)