Crude oil prices surge as US-Iran tensions escalate

New Delhi (IANS): Global crude oil prices traded higher on Wednesday, increasing by up to 1 per cent after the United States launched strikes against Iranian military targets near the Strait of Hormuz. The strikes raised concerns over potential disruptions to energy supplies from the strategically important region.

International benchmark Brent crude gained about 1 per cent to hit $93.26 per barrel. Similarly, US West Texas Intermediate (WTI) crude rose 0.97 per cent to trade around $90 per barrel.

The latest gains followed a statement from the US military, which confirmed it had carried out “self-defence strikes” on Iranian air defence, ground control, and surveillance radar sites near the Strait of Hormuz.

The US Central Command stated that it launched the operation in response to the reported downing of a US Army Apache helicopter in the region. However, Iran denied responsibility for the incident, claiming the helicopter crashed accidentally.

The development marks a fresh escalation in tensions between Washington and Tehran at a time when markets expected a gradual easing of hostilities in West Asia.

Weak investor and trader sentiment also triggered selling pressure in global equities.

Meanwhile, reports claim that US crude oil inventories fell last week for an eighth consecutive week.

Tehran also threatened to reopen hostilities if Israel persisted in attacking the Hezbollah militia in Lebanon.

In addition, Asian markets traded largely in the red. Japan’s Nikkei and Hong Kong’s Hang Seng both fell more than 1 per cent, while South Korea’s KOSPI plunged nearly 4 per cent.

Wall Street ended lower on Tuesday; the Nasdaq Composite declined 0.97 per cent and the S&P 500 slipped 0.26 per cent.

In contrast, domestic equity markets traded higher in the morning session, with benchmark indices gaining up to 0.5 per cent in early trade.