Global oil prices rose to their highest point in six weeks on Monday following military exchanges between the United States and Iran and a reported strike on a Saudi Aramco oil facility. The events in the Middle East preceded a notable increase in the value of both major international oil benchmarks.
On Monday, September 7, Brent crude futures, the international benchmark, increased by 1.3% to $97.52 per barrel. The price reached a high of $97.93 during trading, a level not seen since July 23. The U.S. benchmark, West Texas Intermediate (WTI) crude, also climbed 1.3% to settle at $92.68 per barrel, after briefly surpassing $93 for the first time since late July.
The market activity followed a report from the Financial Times stating that a Saudi Aramco oil facility in Jizan, Saudi Arabia, was struck on Monday. According to the report, an assessment of the damage to the facility, which includes a 400,000-barrel-per-day refinery, was underway. The Financial Times noted that the party responsible for the reported strike was not immediately identified.
Prior to the market opening, the U.S. and Iran engaged in military actions over the weekend. U.S. Central Command (CENTCOM) issued a statement announcing that the U.S. military had conducted strikes against three Iranian oil tankers on Saturday. According to CENTCOM, the action was taken after Iran launched ballistic missiles targeting two U.S. Navy warships. The command’s statement described the Iranian vessels as part of a “shadow network” that funds Iran’s Islamic Revolutionary Guard Corps and its regional affiliates.
In response, Iran’s Foreign Ministry released a statement on Saturday addressing the U.S. strikes. The ministry described the action against the commercial vessels as a “war crime” and an act of “economic warfare.”
The weekend’s events occurred approximately one week after military exchanges between U.S. and Iranian forces resumed, following about a month of decreased activity in the region. The increase in crude oil prices has coincided with higher costs for refined fuels, such as gasoline and diesel.
