Crude Oil Prices Spike, As Tension Between Israel And Iran Intensifies

In another development that could lead the global economy into more strenuous times, crude oil prices have jumped almost overnight. This comes at the back of rising tensions in the Middle East, particularly between arch-rivals of West Asia, Israel and Iran.

According to the numbers at the beginning of 19 April (In India), the Brent crude prices rose by USD 3.17 to jump to USD 90.28 a barrel. Once again, crossing the USD 90 mark. Meanwhile, the U.S. West Texas Intermediate crude (WTI) shot up by USD 3.03 to scale to USD 85.76 a barrel.

The Rising Tensions In West Asia

Iran, apart from being one of the main players in the in carbon product business is also located at an economically and strategically crucial location, albeit the Strait of Hormuz.

Apart from direct and indirect attacks on Iran, Israel received a response from the former in the form of a blitzkrieg that lit up the skies over the Jewish state. This 'pugnacious' response however did not have a great amount of impact on Israel, as most of the fire power launched in the direction of Israel was neutralised by Israel and its allies, including assistance from neighbouring Saudi Arabia and the UAE.

In response, despite warnings and demands for restrain on the side of Israel, the nation appears to have not heeded to them, as they have reportedly attacked, as explosions were allegedly heard near an Iranian city of Isfahan, in western Iran, which is just over 400 kilometres from the Iranian capital, Tehran.

Spike In Prices Affect Markets

This could not lead to rise in fuel prices globally, but also affect the global supply chain at large, as the world's major trade intersections, may it be the Strait of Hormuz or the Red Sea corridor, which is under attack from the Houthis, from northern Yemen continue to be in impending peril.

In pursuance to the latest numbers coming in, Brent crude is trading at USD 89.08 a barrel, having increased by USD 1.97, with a 2.36 per cent surge. Meanwhile, WTI prices stood at USD 84.68, having risen by USD 1.95, or 2.36 per cent at 0910 IST.

The Indian markets have also seemingly reacted to these developments, as the marquee indices, Sensex and Nifty have started the day trade (19 April, Friday) in Red. Here, the Sensex started trading at 71,999.65, down by 489.34 points, and Nifty at 21,832.60, down by 163.25 points.

With the recent development, the scope and space for volatility in the already fragile realm of global trade has only burgeoned, the day and happenings could prove monumental.