Brent crude oil prices surged above $97 a barrel in early trade on Thursday after Israel continued bombing Lebanon amid a two-week ceasefire between the US and Iran. Within minutes of announcing the ceasefire deal with Iran, Brent crude oil prices had declined to the $90.40 per barrel level during Wednesday’s trading session.
However, investor confidence quickly tanked after Israeli forces resumed their military strikes on Lebanon despite the ongoing ceasefire.
The West Texas Intermediate (WTI) crude oil prices had also dropped to $91.85 per barrel after opening at $97.10 per barrel on April 8 as investor confidence returned to the markets. Oil prices have remained highly sensitive to stabilisation efforts and ongoing hostilities in West Asia, along with the partial closure of the Strait of Hormuz over the past six weeks.
The disruption caused in the supply chain has fuelled energy prices and essential commodities around the world, since major Asian economies rely on the Strait of Hormuz for their energy needs.
As of 9:15 am IST, Brent crude oil futures were trading 2.5 per cent higher at $97.02 per barrel after declining to $90 per barrel on Wednesday. A similar increase was noticed in the US-based WTI crude oil prices, which were trading 2.74 per cent higher at $97.02 per barrel.
Surge in oil prices and decline in investor sentiment are correlated with geopolitical stability in the international markets.
As Israel bombed Lebanon on Wednesday night, investor confidence tanked, causing a jump in prices and a decline in share markets. Latest reports also suggest that Hezbollah said it has fired rockets at northern Israel in response to the ceasefire violations in the region.
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