Crude Oil Price: Crude oil prices have once again seen an increase in the international market on Tuesday morning. Oil prices rose in early trade in Asian markets on news that the US had attacked Iran’s Qassem Island. The latest action has heightened tensions in the eight-month-old war between the two countries. The market fears that the attack could disrupt oil supplies from the Middle East for a long time.
Brent crude futures rose 1.57 percent to $106.45 a barrel by 12:30 pm IST on Tuesday. At the same time, American West Texas Intermediate (WTI) crude was also trading at $98.06 a barrel, up 1.66 percent. A day before that, Brent crude saw a big drop on Monday. On Monday, it fell $8.66 (7.63 percent) to close at $104.77 per barrel.
Why did America attack Kshem Island?
The American newspaper Wall Street Journal has reported the attack on Kashem Island citing American officials. Some officials have described the military action as a defensive move. He says the attack was carried out to prevent Iran from attacking merchant ships in the Strait of Hormuz. Tim Waterer, chief market analyst at KCM Trade, said that while the market thought the matter would be resolved through diplomatic means, the news of this military action changed the atmosphere. Due to which the risk in oil prices has increased again.
Major impact on supply through Hormuz
The conflict between the US and Iran started at the end of February. Because of this war, traffic through the Strait of Hormuz has decreased significantly. Before the war, about one-fifth (20 percent) of the world’s total supply of crude oil and natural gas passed through this route. Brent crude hit a six-month high at the end of October. Markets fear that the conflict in the Middle East could flare up further after the US midterm elections on Tuesday.
Pressure on Trump amid peace efforts
On the one hand, military action is taking place, on the other hand, there are talks of stopping the war. Tehran said on Monday that Iran and the US are in contact to end the war. Recently, Iran held talks with Qatari mediators for several days. There were some changes in the proposals, but no concrete results emerged.
Iranian President Masoud Pajeshkian said Supreme Leader Ayatollah Mojtaba Khamenei had given the government some rights for peace talks. At the same time, the cost of petrol in America is increasing the burden on voters. The biggest reason is considered to be the Iran war, due to which there is a lot of pressure on Trump to end this war. Trump on Monday expressed doubt whether he would follow through on his threat to launch another military strike against Iran. He also said that an agreement could be reached with Tehran.
America will host Russia-Ukraine meeting in Abu Dhabi
Apart from the Middle East, America is also trying for peace on other fronts. The US will bring together delegations from Ukraine and Russia in Abu Dhabi on November 10-11. The meeting will discuss ending Moscow’s war against Ukraine, post-war security agreements and de-escalation.
