Global crude oil prices surged by nearly 3% on the morning of 23/6 compared to the end of last week. Brent and WTI crude briefly reached 81.4 USD and 78.4 USD respectively, both five-month highs. Prices have since cooled to 79.2 USD and 75.9 USD.

The market climbed after US President Donald Trump announced he had "obliterated" key Iranian nuclear facilities in a major airstrike last weekend. The US action has escalated tensions in the Middle East.

An oil pump operating in Trigueres, France. Photo: Reuters

An oil pump operating in Trigueres, France. Photo: Reuters

Iran is currently the third-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC). The US action raises concerns about Iran retaliating by closing the Strait of Hormuz, a crucial waterway for about 20% of the global crude oil supply.

Iran's Press TV reported that the country's parliament has approved a plan to close the Strait of Hormuz. Iran has threatened this action multiple times in the past but has not yet followed through.

"The risk to oil infrastructure has increased significantly," said June Goh, senior analyst at Sparta Commodities. While alternative pipelines exist, some crude oil would still be unable to be exported if the Strait of Hormuz were blocked. Shipping companies would increasingly avoid the area.

Since the escalation of the conflict on 13/6, Brent crude prices have risen by 13%, while WTI prices have increased by nearly 10%.

However, analysts assert that sustained price increases are unlikely if the supply isn't significantly disrupted. Furthermore, profit-taking after the recent price surge will make it difficult for oil prices to climb much higher, according to Ole Hansen, commodities strategist at Saxo Bank.

In Asian stock markets, several major indexes declined as investors sold off risk assets. Japan's Nikkei 225 is currently down 0.57%, South Korea's Kospi has lost 1.16%, and Australia's S&P/ASX 200 is down 0.7%. Chinese markets are not yet open.

Bitcoin's price also fell below 99,000 USD, its lowest in a month. Other tokens like Ether, Solana, XPR, and Dogecoin also plummeted as tensions in the Middle East escalated.

Ha Thu (CNBC, Reuters)