Oil prices surged on Monday following a drone attack on US forces in Jordan, intensifying concerns over supply disruption in the volatile Middle East. Brent crude futures rose by 29 cents, or 0.4%, reaching $83.84 a barrel by 0230 GMT, after hitting a session-high of $84.80.
Similarly, U.S. West Texas Intermediate crude gained 34 cents, or 0.4%, climbing to $78.35 a barrel, with an intraday high of $79.29 earlier in the session.
The drone attack, which targeted US troops, heightened apprehensions of a broader conflict in the oil-rich region. The incident occurred as Houthi rebels intensified their assaults on vessels in the Red Sea, striking a Trafigura-operated fuel tanker.
Adding to the geopolitical tensions, risks of a widening conflict have escalated as Russian refined product exports are expected to decline due to several refineries undergoing repairs following drone attacks.
Analysts highlighted the significance of the recent developments, emphasizing the potential for a more substantial US involvement in the region's conflicts.
Helima Croft, an analyst at RBC Capital, noted, "We believe the death of three US service members today in Jordan marks a critical inflection point in the ongoing conflict in the Middle East and raises a specter of a more substantial US involvement in the war." Croft further highlighted that a direct confrontation with Iran could lead to regional energy supply disruptions, heightening market uncertainties.
Officials stated, The surge in oil prices reflects growing concerns among investors regarding the stability of the global oil market amidst escalating geopolitical tensions in key oil-producing regions.
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