Shaun
Brent Hits $75 as Israel-Iran Tensions Keep Oil Markets on Edge
Oil prices climbed again on Monday, with Brent crude trading around $75.18 and West Texas Intermediate (WTI) at $73.18, as escalating tensions between Israel and Iran stirred fears of potential disruption in Middle Eastern oil flows.
Although no physical supply disruption has been reported, traders are increasingly pricing in geopolitical risk premiums, particularly around the Strait of Hormuz, a vital corridor for nearly 20% of global oil trade.
Middle East Uncertainty Driving Volatility
The latest round of Israeli airstrikes and Iranian missile responses has kept the region on high alert. With Iran’s oil infrastructure and shipping routes potentially at risk, investors are wary of any conflict spillover that could affect crude production or transit.
“We’re seeing markets respond more to the threat of disruption than actual changes in supply,” said Anika Mehta, senior commodities strategist at EastBay Analytics. “Right now, fear is fueling the rally.”
Despite the headline surge, physical oil indicators like Dubai swaps have risen less aggressively, signaling a cautious response from Asian buyers and refiners.
Economic Ripple Effects Emerging
In emerging markets, especially energy-importing nations, the spike in oil prices is starting to leave a mark. The Indian rupee fell to a two-month low as higher import costs pressured the currency. The Reserve Bank of India reportedly stepped in to stabilize the market.
Analysts also warned that a prolonged price increase could reignite global inflation fears, undermining central banks’ progress on controlling prices.
A sustained oil rally adds another layer of complexity for monetary policy,” noted Richard Yoon of Global Macro Watch. “If Brent breaks $80, you’ll hear inflation alarms ring louder.”
Looking Ahead
While major producers such as Saudi Arabia and the UAE have not yet altered production, the market remains hypersensitive. Eyes are now on diplomatic signals from the U.S., EU, China, and regional blocs that could influence both conflict trajectory and energy policy.
What to Watch Next:
Movement in the Strait of Hormuz
OPEC+ statements or emergency meetings
Sanctions or shipping insurance changes
Reactions in Asian and European energy markets
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