Oil prices surged by around 3% on Tuesday after Iran launched ballistic missiles at Israel, escalating tensions in the Middle East. Brent crude rose $1.86 (2.6%) to $73.56 a barrel, while U.S. WTI gained $1.66 (2.4%) to settle at $69.83. Earlier in the day, both benchmarks had jumped by over 5%.
Fears of potential disruptions in oil supply grew as Israel’s retaliation could target Iranian oil assets, threatening to remove over a million barrels per day from the market. Meanwhile, attacks on vessels by Iran-backed Houthis off Yemen added to concerns of regional instability affecting global oil producers, especially Saudi Arabia.
Oil prices had been trading near a two-week low earlier, weighed down by expectations of increased supply and sluggish global demand. OPEC+ is set to review market conditions on Oct. 2, with no policy changes expected, while monthly output increases of 180,000 barrels per day are scheduled to start in December.