Economy
Renewed US-Iran Tensions Hike Oil Prices
By Adedapo Adesanya
Oil prices rose on Friday, ending the week substantially higher after the United States and Iran resumed military exchanges in the seventh month of their conflict.
Brent crude futures settled at $92.68 a barrel after chalking up 76 cents or 0.8 per cent, while US West Texas Intermediate (WTI) crude futures finished at $91.48 a barrel, up 18 cents or 0.20 per cent.
The rally in oil prices combined with a much steeper increase in fuel prices has pushed inflation and government borrowing costs higher around the world and intensified fears that global economic growth might pull back without some relief.
US Vice President JD Vance said it does not plan to hold peace talks with Iran until it stops attacking ships in the Strait of Hormuz, which adds to upward pressure on oil prices, seeing as Iran signals determination to stick to its hard line in response to the latest strikes, one of which resulted in civilian deaths.
Attacks carried out by the US this week that killed and wounded dozens were the fiercest clashes between the two countries since July.
The American campaign to throttle Iran’s economy by blockading its oil exports and stopping sanctions evasion is growing increasingly difficult to withstand.
Iran said it has managed to move a lot of oil out of the Persian Gulf during the brief three-week period in which the US blockade was lifted between mid-June and mid-July, also claiming that it is pursuing efforts to boost oil and associated gas production despite the war and the US strikes.
The US government has said Middle Eastern oil flows have returned to near normal levels in recent weeks, but analysts and tanker trackers indicate that flows remain seriously disrupted.
Available data showed that four commodity vessels transited the Strait of Hormuz on Thursday, well below the 10-day average tally of about 15.
Citi raised its average Brent crude price forecast for the third quarter to $86 a barrel from $80, saying the reopening of the Strait of Hormuz was taking longer than previously expected, while ANZ analysts raised their short-term Brent crude forecast to $95 a barrel, with upside risk if the Middle East conflict intensifies.
The American economy added 162,000 jobs in August, allaying fears of weakness in the labour market, but bolstering the case for the US Federal Reserve to raise rates later in September.
