Oil Prices Surge, Iran Conflict Widens and Brent Near Monthly Record High

JAKARTA - World oil prices rose sharply again on Monday, after the conflict in the Middle East spread. Arab News quoted Monday, March 30 reported, the increase was triggered by the first attack by the Yemeni Houthi group on Israel at the weekend, which increased the impact of the US-Israeli war against Iran and added pressure on global energy supply routes.

Brent crude rose US$2.43 or 2.16 percent to US$115 per barrel at 06.42 Saudi Arabia time. Previously, Brent had jumped 4.2 percent on Friday. Meanwhile, US West Texas Intermediate (WTI) crude rose US$1.86 or 1.87 percent to US$101.50 per barrel, after previously strengthening 5.5 percent.

This increase reflects the market's growing uncertainty that the war will end through negotiations in the near future. Vanda Insights founder Vandana Hari said the market practically ignored the opportunity for a negotiated settlement and is now preparing for a sharper military escalation. The situation, said Vandana Hari, is a positive signal for oil prices, although the direction is still uncertain.

As reported by Arab News, US President Donald Trump said Washington and Tehran were still meeting in person and indirectly, and called the new Iranian leader "very reasonable". At the same time, however, US troops continued to arrive in the region, while the Israeli military claimed to have attacked Iranian government infrastructure in Tehran.

Brent has jumped 59 percent so far this month. That was the sharpest monthly gain, even surpassing the spike during the 1990 Gulf War. The main trigger was the disruption of the Strait of Hormuz, a route through which about a fifth of the world's oil and gas supplies pass.

The war that began on February 28 with US and Israeli attacks on Iran has now spread to other regions. The Houthis, allied with Iran, began attacking Israel, sparking new concerns about shipping lanes around the Arabian Peninsula, the Red Sea, and Bab el-Mandeb.

Arab News said JP Morgan analysts assessed that the conflict is no longer concentrated in the Persian Gulf and the Strait of Hormuz, but has spread to the Red Sea and Bab el-Mandeb, one of the most vital points for the flow of crude oil and processed products in the world.

Kpler data shows that Saudi oil exports diverted from the Strait of Hormuz to the port of Yanbu in the Red Sea reached 4.658 million barrels per day last week. If the line is disrupted, Saudi Arabia is said to have to divert supplies via Egypt's Suez-Mediterranean pipeline.

Attacks over the weekend also reportedly damaged the Salalah terminal in Oman, despite efforts to open ceasefire negotiations. Iran said it was ready to respond if the US launched a ground attack. Meanwhile, Pakistan Foreign Minister Ishaq Dar said the talks also touched on possible ways to end the war sooner, including the opportunity for US-Iranian dialogue in Islamabad.