Brent crude oil has spiked above $71.50 per barrel, the highest level in six months as there are mounting concerns that the United States is about to take military action against Iran, according to Oil Price.Com.
The international benchmark, Brent Crude, was up by 1.71 percent at $71.55 in morning trade in Europe, as the U.S.-Iran talks appear to make no headway, while the U.S. is amassing military forces near the Persian Gulf.
The U.S. benchmark oil prices, WTI Crude, also jumped to trade at $66.37 per barrel, up by 1.83 percent on the day, following the 4% surge at Wednesday’s settlement.
There are growing concerns over the possible disruption to Iranian oil supply and Persian Gulf flows, particularly through the Strait of Hormuz.
The Strait of Hormuz is a strait between the Persian Gulf and the Gulf of Oman. It provides the only sea passage from the Persian Gulf to the open ocean and is one of the world’s most strategically important choke points.
It appears the Iranian government is unfazed even as the U.S. had destroyed its nuclear facility with the Bunker-Buster-Bomb. And that is on top of the worst civil protests in its history as the people have risen in protest against the Islamic government who has been in power since 1979.
“For oil markets, the concern is clearly what action would mean not only for Iranian oil supply, but also broader Persian Gulf oil flows, given the risk of disruption to shipments through the Strait of Hormuz,” ING strategists Warren Patterson and Ewa Manthey wrote in a Thursday note.
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