Oil prices jumped more than 2 per cent on Wednesday after renewed fighting between the United States and Iran sent fresh shockwaves through global markets and raised fears of a prolonged disruption to energy supplies.
Brent crude rose 1.9 per cent to 96.45 dollars a barrel, while West Texas Intermediate gained 1.5 per cent to 91.60 dollars. Oil prices have climbed about 10 per cent this week as tensions around the Strait of Hormuz intensify.
The latest escalation followed US strikes on Iranian targets near the strategic waterway. Iran responded with missile and drone attacks on US interests across the Middle East, raising concerns that the six month conflict could widen further.
The Strait of Hormuz, a crucial global shipping route through which roughly one fifth of the world's oil and gas supplies pass, remains effectively closed. With no immediate resolution in sight, investors are increasingly concerned that higher energy costs will fuel inflation around the world.
The renewed conflict triggered a broad sell off in global markets. Asian stocks fell sharply, with technology companies among the biggest losers as investors worried that persistent inflation could force central banks to keep interest rates elevated.
Source: Channels