Oil prices jumped more than 2.5% on Wednesday as Israel and the United States threatened retaliation for Iran’s most direct strike on a regional opponent, which involved the launch of more than 180 ballistic missiles.
In addition, Israel has been sending additional troops into Lebanon to fight Hezbollah, an extremist organization supported by Iran. Despite international calls for a ceasefire, the fighting has escalated quickly.
Oil prices have surged as a result, with Brent futures rising $1.94, or 2.6%, to $75.50 per barrel. As of 12:56 GMT, U.S. West Texas Intermediate (WTI) crude has increased $2.02, or 2.9%, to $71.85.
Tuesday saw a gain of almost 5% in both benchmark crude prices, which ended the day about 2.5% higher.
Iran declared early on Wednesday that, barring new provocation, its missile assault on Israel was halted.
According to Tamas Varga of oil trader PVM, Israeli and US retribution “may include destroying or obliterating Iran’s oil facilities.”
Tehran threatened massive damage in the event that Israel retaliated against the strike.
Varga pointed out that retribution from Iran or its allies can shut down the Strait of Hormuz or target Saudi oil infrastructure, as it did in 2019. He declared, “Any of these developments would permanently drive oil prices significantly higher.”
The Israeli military escalated the confrontation further on Wednesday when it dispatched regular infantry and armored troops to participate in combat operations against Hezbollah, which is supported by Iran, in southern Lebanon.
The European Union demanded an immediate ceasefire, and the UN Security Council set a conference to discuss the Middle East for this Wednesday.
According to ANZ analysts, Iran’s oil production reached a six-year high of more than three million barrels per day (bpd) in August.
