Global oil prices surge amid war fears in the Middle East; Brent crude hits six-month high

[Financial News] International oil prices surged to their highest level in six months as concerns grew that the war between the United States and Iran could intensify again. The possibility of disruptions to crude oil supplies from the Middle East, combined with declining global crude inventories, is once again stoking inflation concerns as energy prices rise.
On the 23rd (local time), December Brent crude futures settled at $116.72 a barrel on the ICE Futures Exchange in London, up 3.14% ($3.55) from the previous session. That was the highest closing price since April 29. Prices also topped $117 during the session. Brent crude has risen about 20% since early September and more than 90% so far this year.
On the New York Mercantile Exchange (NYMEX), December West Texas Intermediate (WTI) crude also settled up 3.82% ($3.80) at $103.27 a barrel.
The main driver of the sharp rise in international oil prices is military tension in the Middle East. As speculation grows that the United States and Israel could resume military strikes against Iran after the U.S. midterm elections on the 3rd of next month, concerns have spread that crude oil supplies could tighten again.
Earlier, The New York Times (NYT) reported that the United States and Israel had drawn up plans for strikes targeting Iran’s energy and nuclear facilities, as well as its missile and drone capabilities. Iran, in turn, has warned that it would respond forcefully if further attacks are carried out.
Concerns are also mounting over crude oil production and transport facilities in the Middle East. Yemen’s pro-Iranian Houthi rebels have stepped up attacks on Saudi Arabia, while attacks targeting commercial vessels have continued in the Strait of Hormuz and nearby waters. With the security of major global oil shipping routes under threat, concerns about supply disruptions appear to be reflected in oil prices.
Declining crude inventories are also driving prices higher. The U.S. Energy Information Administration (EIA) estimated that global crude inventories fell by an average of 1.9 million barrels per day in the third quarter of this year. It forecast a further decline averaging 700,000 barrels per day in the fourth quarter. If additional supply disruptions occur in the Middle East, oil prices could come under even greater pressure.
Rising international oil prices are also affecting inflation and interest rates. The yield on U.S. 10-year Treasury bonds fell below 5% the previous day, then edged back up today to around 4.99%. The move is seen as reflecting concerns that rising energy prices could stoke inflation again.
With the war in the Middle East dragging on and concerns over crude oil supplies persisting, volatility in international oil prices is also expected to increase for the time being.

[email protected] Kim Kyung-min Reporter