Oil prices rise more than USD 1 on escalating tensions in the Middle East

TOKYO – US West Texas Intermediate (WTI) crude futures rose by USD 1.09, or 1.56%, to USD 70.92 per barrel at 2254 GMT on fears of oil supply disruptions in the Middle East after Iran fired ballistic missiles at Israel.

Brent futures will resume trading at 0000 GMT on Wednesday. Brent gained USD 1.86, or 2.6%, on Tuesday to settle at USD 73.56 a barrel.

Iran fired more than 180 ballistic missiles at Israel on Tuesday, Israel said, in retaliation for Israel’s campaign against Tehran’s Hezbollah allies in Lebanon.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), is a major oil producer in the region.

“The direct involvement of Iran, an OPEC member, raises the prospect of disruptions to oil supplies,” ANZ Research said in a note, referring to the conflict.

Iran’s oil output rose to a six-year high of 3.7 million barrels per day in August, ANZ added.

Israeli Prime Minister Benjamin Netanyahu promised Iran would pay for its missile attack against Israel, while Tehran said any retaliation would be met with “vast destruction”, raising fears of a wider war.

US President Joe Biden expressed full US support for Israel, its longtime ally, and the U.N. Security Council scheduled a meeting on the Middle East for Wednesday.

(Reporting by Katya Golubkova; Editing by Jamie Freed)