Oil Prices Hit 5-Month High – Here’s Why

What’s Happening? Oil prices jumped after U.S. and Israel attacked Iran’s nuclear sites over the weekend. This raised fears of a major supply disruption in the Middle East. Current Oil Prices: 🔺 • Brent Crude: $78.93/barrel (↑ 2.49%) • WTI Crude: $75.73/barrel (↑ 2.56%) Prices earlier spiked to $81.40 (Brent) and $78.40 (WTI) — the highest since January. Why the Surge? • Iran is OPEC’s 3rd largest oil producer. • The market fears Iran might retaliate by closing the Strait of Hormuz, a key route through which 20% of global oil supply passes. Big Update: Iranian Parliament has approved the closure of the Strait of Hormuz. If this happens, oil shipments could be severely disrupted and prices may surge even more. Why the Strait of Hormuz Matters: • Critical for oil exports from the Gulf • Blocking it means less oil in the market = higher prices • Shippers may start avoiding the region due to risks What Might Be the Impact: • Goldman Sachs: If flow drops by half for 1 month, Brent may hit $110 • Brent is up 13% and WTI up 10% since June 13 when tensions rose Important Note: If no real disruption happens, the price hike may fade. But if the strait is blocked, markets could face a serious shock. Takeaway: Geopolitical tensions are driving oil prices up. The approval to close the Strait adds serious risk. Be ready for more volatility ahead.