NEW YORK - Global oil markets experienced upward price adjustments on Monday, largely influenced by escalating tensions in the Middle East and ongoing conflicts, notably the Russia-Ukraine war, that threaten to constrict oil supply channels.
According to Philippine News Agency, Brent crude, the international oil benchmark, was trading at $87.24 per barrel in the early trading hours, marking a 0.32 percent increase from its last close at $86.96. Concurrently, West Texas Intermediate (WTI), the U.S. benchmark, saw a modest rise to $83.42 per barrel, up by 0.30 percent from $83.17 at the close of the previous session.
The geopolitical strife between Israel and Palestine, along with the protracted Russia-Ukraine conflict, has intensified concerns over global energy supplies, subsequently pushing oil prices higher. Despite a UN Security Council resolution advocating an immediate ceasefire in Gaza, Israeli military operations persist, further exacerbating regional instability.
Moreover, the situation has been aggravated by actions from Iran-backed Houthis in Yemen, who have targeted maritime vessels associated with Israel in the Red Sea. Retaliatory measures by the U.S. and the UK against Houthi infrastructures have further escalated tensions. Notably, the U.S. disclosed it had neutralized four Houthi unmanned aerial vehicles in recent defensive actions, signaling a continuing cycle of retaliation.
Additionally, the oil sector faced disruptions from drone assaults on Russian refineries, resulting in operational halts that question Russia's ability to sustain its export levels. Given that Russia accounts for about 8 percent of the global oil supply, these interruptions have direct implications on the global market, particularly affecting the availability of refined oil products and influencing fuel prices.
These cumulative factors contribute to a tighter global oil market, prompting analysts to forecast potential spikes in Brent crude prices, potentially reaching or exceeding $100 per barrel within the year, especially in light of Russia's announced production cuts of 471,000 barrels per day for the upcoming quarter.