Oil surges on conflict concerns

Financial and commodity markets analytics

The oil price has continued to rise in today’s trading session after yesterday’s gains on the back of attacks on two oil tankers in the Gulf of Oman raised concerns that a war between the US and Iran may be in the making.

The Iranians have been fingered as possible suspects behind the attacks which threatens to disrupt or even block the transit of oil through one of the most important waterways and ultimately drive up the price.

“We have people of every nationality and vessels of every flag transiting that crucial sea lane,” said Paolo d’Amico, chairman of International Association of Independent Tanker Owners. “If the waters are becoming unsafe, the supply to the entire Western world could be at risk.”

The threat of war has now dramatically escalated with US secretary of state Mike Pompeo squarely laying the blame on Iran for the attacks basing evidence on previous incidents and now it remains to be seen how the US will respond

“This assessment is based on intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication.” Pompeo said.



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