Crude Oil Prices Rise Amidst US-Iran Tensions

New York. Crude oil prices have increased in the global market. On Wednesday's trading, crude oil prices rose by nearly 2 percent after the United States imposed sanctions on crude oil sales by launching a new airstrike on Iran. 

Concerns have increased that oil supply may be affected again as tensions escalate in West Asia. After Iran attacked three commercial ships in the Strait of Hormuz, the United States launched a widespread attack on Iran.

At London-based ICE Exchange's Comex division on Wednesday, Brent Crude's price increased by 1 dollar 38 cents per barrel to 75 dollars 54 cents. This is 1.9 percent more than the market closing on the previous day. Similarly, at the New York Mercantile Exchange's Comex division, West Texas Intermediate (WTI) Crude's price also increased by 1 dollar 37 cents to 71 dollars 81 cents per barrel. This is also 1.9 percent more than the market closing on the previous day. During the initial phase of trading, WTI's price at one point increased by up to 2.8 percent.

After the Iranian attack, the US revoked the general license allowing the sale of Iranian crude oil on Tuesday, causing both benchmarks to rise by approximately 3 percent on Tuesday. Market analyst firm MST Marquee's research head Saul Kavonic said that the current fire has reminded the market how vulnerable the route through the Strait of Hormuz still is. 

According to him, amidst expectations of an oversupply of oil in the market, the current tension has given a contrary signal. This may force some traders who invested in the expectation of oil prices falling to change their strategies.

Kavonic said that if the tension continues for a long time and shipping traffic through the Strait of Hormuz is limited to less than 50 percent of the pre-war level, oil supply in the global market may shrink, and crude oil prices may increase further. Last month, after a ceasefire agreement between Iran and the US, oil prices had fallen to pre-war levels for Iran.