Oil prices surge as Middle East tensions escalate
Oil prices on the fuel exchange in New York are rising. Investors' attention is focused on the Middle East after the death of the president of Iran and due to the illness of the king of Saudi Arabia, brokers report.
6:34 AM EDT, May 20, 2024
Oil prices on the fuel exchange in New York are rising. A West Texas Intermediate oil barrel costs $80.21 on NYMEX, while Brent on ICE costs $84.28 per barrel.
In the markets, investors' attention is focused on the Middle East after the death of the president of Iran.
President of Iran Ebrahim Raisi, Foreign Minister Hossein Amirabdollahian, and several other high-ranking Iranian officials died in a helicopter crash near Jolfa in Iran's East Azerbaijan province, the Iranian Red Crescent reported on Monday morning.
The helicopter crashed into the side of a mountain and completely burned.
Presidential elections in Iran
The disaster occurred when President Raisi returned from the dam opening ceremony on the Aras River on the Iran-Azerbaijan border, in which he participated with Azerbaijani President Ilham Aliyev.
The Iranian constitution states that in the event of the president's death, the first vice president—currently Mohammad Mokhber—will take office with the approval of the Supreme Leader Ali Khamenei. After 50 days, presidential elections will be organized.
President Raisi was seen as a favorite to succeed Supreme Leader Ayatollah Ali Khamenei, the highest authority of the Islamic Republic.
Meanwhile, the Saudi Press Agency reported that the king of Saudi Arabia, Salman Bin Abdulaziz, is to be treated for a lung disease. King Salman is the head of the world's largest oil exporter.
Russian refinery on fire. Work suspended
Market players are also observing events related to Russia's war in Ukraine.
Ukrainian drones hit the Russian Kuschevskaya airport and Sloviansk oil refinery in the Krasnodar region on Saturday evening, Interfax-Ukraine reported. The airport in Russia hosted many planes that attacked Ukrainian positions on the front line.
After the attack by Ukrainian drones, which hit rectification and atmospheric columns, the refinery in Sloviansk suspended its work.
In another incident, an oil tanker traveling from a Russian port to China was hit by a missile in the Red Sea on Saturday, launched by the Houthis, the U.S. Central Command reported.
The tanker was hit by a missile near the Bab el-Mandeb Strait, about 12 miles from the Yemeni port of Mokha.
Attacks on merchant vessels in the Red Sea
Iran-backed Houthis have been attacking warships and merchant ships passing through the Red Sea since mid-November 2023, especially those linked to Israel, the U.S., and the U.K., in response to Israel's war with Hamas in the Gaza Strip.
The Houthis "effectively" closed a key global shipping route, forcing many ships navigating between Europe and Asia to avoid the Suez Canal and circle southern Africa.
According to analysts, events in the Middle East may stimulate demand for safe havens on Monday, although oil prices and other commodities are not changing much for now.
