Brent crude tops $90 per barrel as US-Iran conflict fuels supply concerns

Brent crude prices rose more than 2% on July 20, climbing above $90 per barrel as the escalating military confrontation between the United States and Iran heightened fears of potential disruptions to oil shipments through the Strait of Hormuz, Reuters reports.

As of 06:41 Baku time, Brent futures were up $2.09, or 2.37%, at $90.19 per barrel, their highest level since June 11. The benchmark had already gained 15.9% last week, marking its largest weekly increase since April.

US West Texas Intermediate (WTI) crude futures rose $1.71, or 2.07%, to $84.20 per barrel, the highest level since June 12. WTI advanced 15.5% last week, its strongest weekly performance since early March.

The latest surge followed a further escalation in regional tensions, with the United States continuing strikes on targets in Iran for a ninth consecutive night, while Kuwait and Bahrain reported new Iranian attacks.

“ICE Brent broke above $90 per barrel this morning with no let-up ​in the escalation in the Gulf,” analysts at ING noted.

In recent days, tensions at sea have intensified as both sides have targeted commercial shipping. The United States says it is enforcing a naval blockade on Iranian ports, while Iran maintains that it is targeting vessels that violate its navigation regulations in the Strait of Hormuz, a key waterway through which roughly one-fifth of global oil trade passes.

Meanwhile, a vessel caught fire northwest of Oman's Kumzar, according to the United Kingdom Maritime Trade Operations (UKMTO) agency in a statement issued early on July 20.

Commenting on the situation, Barclays analyst Amarpreet Singh wrote in a note: "The coming days and weeks will provide a clearer picture of the sustainable level of oil exports from the region under renewed dual blockades."

By Jeyhun Aghazada