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Brent prices, highest level in 8 months, affected by Middle East tensions

UNITED STATES (OBSERVATORY NEWS) — Oil futures rose to the highest level in 8 months for Brent crude, Monday, driven by geopolitical tensions in the Middle East, after the assassination of the United States, commander of the Qods Force in the Iranian Revolutionary Guard, Qassem Soleimani, last Friday.

Iran has vowed to respond militarily to the assassination of Soleimani, by hitting American targets in the Middle East region, while US President Donald Trump said on Sunday that his country would respond “quickly and completely” if Iran attacked any US targets.

By 06:36 GMT, Brent crude futures for March delivery rose 2.33 percent or $ 1.6 to $ 70.20, the highest level since last May.

Also, US West Texas Intermediate crude for February delivery rose 2.08 percent, or $ 1.31, to $ 64.36 a barrel.

Analysts view the Strait of Hormuz as one of the Iranian response tools to the assassination process by hindering the supply of crude oil from the Gulf countries, which threatens prices to rise towards $ 100 a barrel.

The average daily flow of oil in the strait was 21 million barrels per day in 2018, equivalent to 21 percent of the consumption of petroleum liquids worldwide, according to the US Energy Information Administration, making it the largest waterway in the world.

And repeatedly in the past two years, Trump has called on OPEC countries (producing 30 percent of global demand for crude) to increase oil production to reduce prices below $ 60 a barrel.

Ahmed Hassan Karam, an analyst for the global oil markets, said that the effects of the assassination will be difficult for the region and will be reflected in the oil prices if they are not contained quickly.

He said in a statement to Anatolia: “Maybe we will see record highs as a result, and we may see the prices of $ 100 a barrel again if military operations or political threats occur in the Gulf region.”

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