As geopolitical tensions surrounding Iran escalated, international oil prices surged more than 3% on the 29th (local time). Prices rose on concerns about supply disruptions as speculation mounted that U.S. airstrikes on Iran were imminent.
On the ICE Futures Exchange, March Brent crude futures settled at $70.71 per barrel, up 3.4% from the previous session. It was the first time in about six months, since late July last year, that Brent's settlement price topped $70 per barrel.
On the New York Mercantile Exchange, March West Texas Intermediate (WTI) futures settled at $65.42 per barrel, up 3.5% from the previous session. WTI also closed at its highest level since late September last year.
The backdrop to the sharp rise in oil prices is the heightened military tension between the United States and Iran. U.S. President Donald Trump has repeatedly hinted at the possibility of intervention after thousands were killed or injured as Iranian authorities cracked down on anti-government protests in recent days.
Regarding the deployment of the U.S. aircraft carrier Abraham Lincoln strike group to the Middle East the previous day, President Trump pressed Iran, saying, "A massive fleet is heading to Iran," and, "Come quickly to the negotiating table and negotiate a fair and equitable 'ban on nuclear weapons' agreement."
Iran, for its part, says it is open to fair and equal nuclear talks but maintains it will respond strongly if the United States carries out acts of aggression. Al-Akhbar, a Lebanon media outlet friendly to Hezbollah, cited a source at Iran's Foreign Ministry as saying the United States is demanding the dismantling of the nuclear program, limits on defense capabilities, and even recognition of Israel, effectively forcing a surrender.
John Evans, an analyst at oil brokerage PVM, told Reuters, "The market is worried about the shock that could occur if Iran attacks neighboring countries or blocks the Strait of Hormuz."