JAKARTA - Oil prices rose again on Wednesday as the conflict between Iran and the United States heated up. The risk of supply disruptions through the Strait of Hormuz pushed Brent prices close to $86 per barrel.
According to a report by Arab News, citing Reuters, reported that Brent futures rose 99 cents, or 1.2 percent, to $85.72 a barrel at 0700 Saudi time.
The price of West Texas Intermediate or WTI, the United States benchmark oil, rose 64 cents, or 0.8 percent, to $79.98 a barrel. Brent is one of the main benchmarks for world oil prices.
A day earlier, oil prices closed up 2 percent and hit a one-month high. A series of attacks exacerbated supply disruptions in the Strait of Hormuz.
Before the US-Israeli war against Iran began, the pipeline carried about a fifth of the world's oil and liquefied natural gas supplies.
Tensions escalated after US President Donald Trump reimposed a naval blockade on all Iranian ports. Tehran also launched an attack on US infrastructure in the region.
"Although the physical supply of oil is still adequate, an increase in conflict in the Strait of Hormuz or additional sanctions on Iranian exports can quickly tighten market sentiment and add a risk premium," said senior market analyst Phillip Nova, Priyanka Sachdeva.
Risk premiums are additional prices because the market takes into account the possibility of supply disruptions and geopolitical uncertainties.
The US military early Wednesday began a new wave of attacks. The attack is said to aim to weaken Iran's ability to attack commercial vessels in the Strait of Hormuz.
Iran said it was closing the strait again after a conflict with the United States flared up again last week. The situation threatened a fragile ceasefire reached in June after months of fighting.
The heating of the conflict also adds to doubts that the memorandum of understanding signed last month can stop the war permanently.
Trump opened the possibility of attacking Iranian energy facilities.
"I'll save the energy target for last, but at the end of the day we're going to hit the energy target," Trump told Fox News.
The Iranian military said it had launched a drone attack on US positions at Azraq Air Base, Jordan. The Pentagon has not commented.
The Iranian Islamic Revolutionary Guard Corps also claimed to have attacked weapons facilities and storage warehouses in Bahrain and Kuwait. Reuters has not been able to verify the claim.
Head of Market Analyst KCM Trade Tim Waterer assessed that oil prices still have the opportunity to approach 100 US dollars per barrel if the conflict escalates and damages energy infrastructure in the Gulf region.
However, according to Waterer, Brent prices could remain in the range of 75 to 80 US dollars per barrel if diplomatic efforts succeed in reopening the Strait of Hormuz.
"The risk premium is still attached. However, prices are not necessarily going to continue to rise because both parties still have reasons to seek a diplomatic solution," said Waterer.
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