Oil has popped to a fresh high on Thursday morning as growing tensions in the Middle East raise concerns about the supply of the commodity.
By around 8.20 a.m. BST (3.20 a.m. ET) Brent crude, the global oil benchmark, was up 0.4% to trade at $77.66 per barrel, reaching a high not seen since November 2014. On Wednesday, as tensions over President Trump’s withdrawal from the Iran nuclear deal increased, Brent saw its price rise 3%.
WTI oil, the US benchmark, also gained early on Thursday, trading 0.75% higher at $71.67 per barrel, having also seen significant gains on Wednesday.
”President Trump’s unilateral plans to tighten sanctions against Iran and pull out of the JCPOA agreement could see Iranian oil production and exports fall sharply,” Dan Smith of Oxford Economics said on Wednesday evening.
“The threat has helped oil prices rally, with Brent now at US$77pb, up 40% from the end of 2016.”
While tensions over Iran grow, there was a further catalyst overnight as Iranian forces in Syria traded missile fire with the Israeli army.
Iranian forces based in Syria fired 20 rockets at Israeli front-line military positions in the Golan Heights early on Thursday, the Israeli military said, triggering an Israeli reprisal and escalating already heightened tensions in what appeared to be the most serious violence in years.
Elsewhere in markets, the rising tensions seen in the Middle East have not passed into equities, with European bourses trading largely flat to start the day. Here’s the scoreboard in the first hour of trading:
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