Oil prices rise after U.S. and Saudi Arabia attack iran-backed militias in Iraq

Oil prices surged as the U.S. and Saudi Arabia conducted strikes on Iran-backed militias in Iraq, escalating geopolitical tensions in the region. Brent crude and WTI crude, the two primary global oil benchmarks, saw significant increases of over 4% on July 29. The strikes came in response to more than 30 drone attacks directed by Iran’s Revolutionary Guard on Saudi energy infrastructure and U.S. military forces over the preceding days. This escalation has heightened concerns about potential disruptions in oil supply from the Middle East, a critical region for global energy markets. Key Takeaways Market behavior suggests increased concerns about potential oil supply disruptions following the U.S. and Saudi strikes. Pricing appears consistent with heightened risk premiums in oil markets, reflecting geopolitical tensions in the Middle East. Current odds indicate a modest increase in the likelihood of crude oil reaching a new all-time high by the end of the year. What to Watch Markets will closely monitor further developments in the Middle East, particularly any additional military actions or diplomatic efforts. Statements from key figures like OPEC’s Mohammad Sanusi Barkindo and IEA’s...