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Oil Prices May Rise Further Amid Middle East Unrest

Oil prices immediately responded to growing tensions between the U.S. and Iran with a strong increase – surging above $70 per barrel on Monday.

oil rates risePhoto: Reuters

Iraq, meantime, decides to immediate withdraw foreign troops from the country, provoking thus also the U.S. retaliatory measures, whereas the latter in their turn threaten with “unprecedented sanctions.”

The U.S. State Department warned of an “increased risk” of attacks on oil facilities in Saudi Arabia.

Against this background, the analysts’ opinion is quite justified: “We see further potential for oil price growth taking into account the risk premium. The Brent price may move to $80 per barrel as Iran prepares and implements the response. ”

As for the oil rates on Monday, Brent international benchmark soared by 2.20 percent, to $70.12 per barrel, whereas U.S. WTI light crude added 1.93 percent, to $64,27 per barrel at 0845 GMT.

One of the key risks for the oil market is Iran’s blocking of the Strait of Hormuz, which exports a significant amount of the oil produced by the Gulf countries.

Meanwhile, shares of Saudi Aramco declined by 1.7 percent to the lowest level since the initial shares placement in December. Saudi Aramco’s share is trading at 34.55 riyals. Gulf stock quotes are also declining.