▲ Oil tankers in the Strait of Hormuz
International oil prices surpassed $117 per barrel on October 23 (local time) amid growing concerns that the war between the United States and Iran could reignite following the US midterm elections.
With escalating military tensions in the Middle East compounded by shrinking crude inventories, energy-driven inflationary pressures are showing signs of resurging.
According to the Financial Times (FT) of the UK, December delivery Brent crude, the global benchmark for oil prices, rose as much as 3.5% during intraday trading to hit $117.14 per barrel.
This marks the first time Brent crude has exceeded the $117 mark since April.
Compared to early September, prices are up by approximately 20%, and have surged more than 85% since the beginning of the year.
The recent spike in oil prices stems from mounting concerns that the US and Israel may resume attacks on Iran following the US midterm elections next month.
The New York Times (NYT) reported on October 21 that the US and Israel have drawn up plans to launch renewed attacks on Iran after the midterms.
Targets currently being considered by the US and Israel reportedly include Iranian energy infrastructure, nuclear facilities located at the so-called "Pickaxe Mountain," and missile and drone capabilities.
Warning of a hardline response should the US and Israel launch fresh strikes, Iran has intensified attacks on oil tankers passing through the Strait of Hormuz.
As the Iran-backed Houthi rebels in Yemen also expand their attacks against Saudi Arabia, the US has evacuated some of its local diplomats and their families.
Helima Croft, global head of commodity strategy at RBC Capital Markets, stated, "With military conflicts expected to escalate shortly in the Middle East, oil prices continue to rise," adding that "talk of 'the war ending soon' holds no weight in the face of actual incoming missile strikes."
Amid prolonged anxieties over crude supply instability, global oil inventories are also on the decline.
In a report released on October 6, the US Energy Information Administration (EIA) estimated that global crude inventories decreased by an average of 1.9 million barrels per day in the third quarter of this year, and projected a further reduction of 700,000 barrels per day on average in the fourth quarter.
(Photo: AP, Yonhap News)
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