Iran War Enters Third Week, Oil Prices Predicted to Continue Surging

World oil prices are expected to continue rising at the opening of trading early this week.

The United States-Israel war against Iran, now in its third week, is considered to threaten oil infrastructure and has kept the Strait of Hormuz closed, representing the world’s largest supply disruption.

According to CNBC reporting, the International Energy Agency (IEA) stated last Sunday that more than 400 million barrels of oil reserves will soon begin flowing to the market. This action was taken to combat the price surge caused by the Middle Eastern conflict.

The agency also stated that stocks from Asia and Oceania will soon be released, and stocks from Europe and America will be available by end of March.

Brent crude futures contracts rose 2.67 per cent, or 2.68 US dollars, closing at 103.14 US dollars per barrel. This figure equates to IDR 1,749,259 assuming an exchange rate of IDR 16,960 per US dollar.

Meanwhile, US West Texas Intermediate crude oil prices rose 3.11 per cent, or 2.98 US dollars, to 98.71 US dollars per barrel.

On the other hand, US President Donald Trump has urged allies to deploy warships to help secure the strategic waterway. Trump also threatened further strikes against Iran’s Kharg Island oil export hub after the US attacked military targets there on Saturday.

The threat triggered a defiant response with further retaliation from Tehran. Iranian drones struck a major oil terminal in Fujairah, United Arab Emirates, shortly after the strike on Kharg.

“This marks an escalation of the conflict,” said JP Morgan analyst Natasha Kaneva.

Oil loading operations at Fujairah have resumed. Fujairah, located outside the Strait of Hormuz, serves as the exit route for approximately 1 million barrels per day of the UAE’s key Murban crude oil.

It should be noted that this volume is equivalent to approximately 1 per cent of global demand.