Oil prices surge as market reacts to global political uncertainty

World oil prices have shifted to an upward trend during trading on the London Stock Exchange ICE, as indicated by the latest data.

Futures contracts for Brent crude oil, the benchmark grade, saw an increase of 0.44% to $75.41 per barrel, with prices peaking at $75.62, Caliber.Az reports.

Meanwhile, December futures for West Texas Intermediate (WTI) oil climbed to $71.78, up 0.43%.

Experts attribute the rising costs of energy resources to anticipation surrounding the US presidential election and concerns about potential escalations in the Middle East conflict.

Earlier, OPEC+ nations extended their decision to cut oil production for the third time, agreeing not to increase output until the end of the year. This group includes eight countries: Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman. Last November, OPEC+ committed to a voluntary production cut of 2.2 million barrels per day due to falling stock prices.

Consulting firm Kept predicts that increased production from the US and OPEC+ countries will lead to a decline in raw material prices in 2025. They forecast an average Brent oil price of $76 per barrel for that year, which represents a 6% decrease compared to current levels. This estimate is based on a consensus forecast from over 50 analytical firms, agencies, and investment banks.

Oil prices surged in early October due to fears of a significant military conflict in the Middle East involving Iran. Experts speculated that Israel might retaliate against Iran's oil infrastructure following a major missile attack, with the possibility of Iran responding by closing the Strait of Hormuz, a key transit route for Arab oil. However, as Israel focused on targeting military sites and Iran chose not to retaliate, oil prices subsequently fell.

Analysts from major oil trading firms, including Gunvor and Trafigura, have predicted a medium-term decline in Brent prices to $60 per barrel. They attribute this assessment to a significant oversupply of crude oil in relation to demand, compounded by a slowdown in economic growth in China, one of the largest consumers of oil. Additionally, the European Union has been pressuring the new European Commissioner for Energy, Dan Jorgensen, to take action to reduce energy prices.

By Tamilla Hasanova