Despite the start of negotiations between the United States and Russia and Washington’s suspension of sanctions on Russian diesel fuel exports to the global market, oil prices rose on international markets today.
On the London exchange, the price of Brent crude increased by $2.26 to $111.10 per barrel. On the New York exchange, Light crude rose by $1.80 to $98.95 per barrel. The price of Azerbaijan’s Azeri Light crude, considered a high-quality and premium-grade oil due to its low sulfur content, also increased by 0.02% to $119.70 per barrel.
The latest surge in prices has been driven by preparations by the United States for potential new military operations against Iran. According to The New York Times, the possibility of launching new operations was discussed by US Secretary of Defense Pete Hegseth and Israeli Prime Minister Benjamin Netanyahu, and an agreement was reportedly reached on the matter.
Preparations are reportedly underway at US military bases across the Middle East, while military aircraft flights over Iraq have increased in frequency. Under the reported plan, strikes against Iran’s energy, nuclear and other economic infrastructure would be launched after the US midterm elections scheduled for November 3.
Iran would undoubtedly respond to such strikes. In that event, potential targets would once again include military bases located in the territories of US allies in the Middle East, as well as vessels operating in the Persian Gulf and the Strait of Hormuz.
Military operations would inevitably disrupt global energy supplies. Based on the fundamental principles of supply and demand, a reduction in oil supplies is expected after November 3. This would make it more difficult to meet market demand and push prices higher.
These developments have prompted oil refineries to take action. Refineries in Asian and European countries are likely to seek to purchase large volumes of crude oil in anticipation of a sharp increase in prices and the approaching winter season.
Oil prices have continued to rise despite US Energy Secretary Chris Wright’s statement on Fox News that 80% of oil supplies through the Persian Gulf had been restored.
The issue is that exports of liquefied natural gas (LNG) from the Middle East have also been restricted, alongside oil supplies. A shortage of LNG, which is used to operate heating systems and power generators, has forced some countries to switch to fuel oil and other petroleum products. This, in turn, has increased demand for crude oil.
For now, oil prices continue to rise under the influence of geopolitical factors. A decline in prices is not expected in the near future.
Image: Reuters