Crude Oil Price Updates: Crude oil rose for the fourth day, Brent crossed $ 85, will the price reach $ 110?

Business Desk – Crude Oil Price Updates: Amid increasing tension between America and Iran, crude oil prices have increased for the fourth consecutive day. In the global market, Brent crude has crossed $ 85 per barrel, while WTI crude is trading above $ 80 per barrel. Experts believe that if tensions in the Middle East increase further and oil supply is affected, then Brent crude may reach $ 110 per barrel.

Crude oil prices increased for the fourth day

On Thursday, Brent crude futures rose 33 cents (0.4%) to $85.28 a barrel. Whereas WTI crude futures are trading at $ 80.02 per barrel with an increase of 42 cents (0.5%). Before this, Brent crude has increased by about 12% in the last three trading sessions. Both the major benchmarks are trading near one-month highs.

Why did it accelerate?

The biggest reason for the rise is the increasing military tension between America and Iran. The US launched new airstrikes on Iran on Wednesday and claimed to have intercepted an empty oil tanker heading towards an Iranian port.

After this, the fear of disruption in the supply of crude oil from the Middle East increased, which led to a rise in prices in the global market. Apart from this, Ukraine’s continuous attacks on Russian oil tankers and fuel bases have also increased concerns about global energy supply.

Tension increased on the Strait of Hormuz

US President Donald Trump has said that military action will continue until Iran stops attacking ships and reopens the energy corridor. According to media reports, America is also considering targeting Kharg Island, Iran’s main oil export center.

At the same time, the Islamic Revolutionary Guard Corps (IRGC) has made it clear that the Strait of Hormuz will remain closed until America stops its military operations and lifts the blockade on Iranian ports.

Why increased concern over oil supply?

The Strait of Hormuz is one of the world’s most important energy routes. About 20% of the world’s crude oil and fuel is supplied through this route. Any kind of disruption here can have an impact on the oil market of the entire world.

Due to the recent attacks, the ‘shuttle run’ transfer between oil tankers at sea has also been affected. However, with the help of the American Army, the movement of ships through this route still continues.

Will crude oil reach $110?

Global investment bank Goldman Sachs estimates that if the blockage in oil exports from the Gulf region continues, then Brent crude could cross $ 110 per barrel in the fourth quarter of this year. However, the bank also believes that if geopolitical tensions subside and production increases, then by the end of the year prices may again come back to around $ 60 per barrel.

Choice Broking’s commodity and currency analyst Aamir Makda says that if US-Iran tension increases, Brent crude may go above $ 100 per barrel. According to him, the risk in the market has increased due to military tension in the Strait of Hormuz. This is the reason why oil prices are continuously rising. If this situation continues for a long time, the pressure of inflation and stagflation on the global economy may also increase.