Brent crude oil prices have surged nearly 12% since last Friday, driven by renewed geopolitical risks as Iran has again threatened to block the Strait of Bab al-Mandab, a critical route for Saudi oil exports that have been rerouted from the Strait of Hormuz [1]. According to Commerzbank’s commodity team, the recent exchange of military strikes over the past few days has significantly increased oil and gas prices [1]. The bank warns that if a blockade of the Strait of Bab al-Mandab occurs due to further escalation, oil prices are likely to rise even higher [1].
Commerzbank also notes that crude oil processing could increase in July following the lifting of the export ban on oil products [1]. Additionally, crude oil imports are expected to rise this month as oil tankers that managed to pass through the Strait of Hormuz in June are set to arrive at Chinese ports [1].
The combination of geopolitical tensions and changes in trade flows is providing strong support for Brent prices, with the potential for further upward movement if the situation escalates [1].
CONCLUSION
Brent oil prices have experienced a sharp increase due to heightened geopolitical risks and threats to key shipping routes. Market participants are closely watching the situation, as further escalation could drive prices even higher.