Oil prices continued to rise sharply in the first trading session of the week as efforts to end the Iranian conflict have not made clear progress, amid further tense developments in the Middle East.
As of 3:34 PM Vietnam time, Brent oil prices increased by 0.78 USD, equivalent to 0.72%, to 110.05 USD/barrel after reaching 112 USD/barrel at one point - the highest level since May 5.
Meanwhile, US WTI oil increased by 2 USD, equivalent to 1.9%, to 107.42 USD/barrel. Previously, this oil price had jumped to 108.70 USD/barrel - the highest level since April 30. The June WTI oil contract will mature this Tuesday.
Both key oils have increased by more than 7% in the past week as expectations for a peace agreement to end attacks and seizures of ships around the Strait of Hormuz continue to decline.
Exchanges between US President Donald Trump and Chinese President Xi Jinping last week also did not show clear signs that China - the world's largest oil importer - will participate in promoting the resolution of the conflict related to Iran.
Meanwhile, drone attacks targeting the UAE and Saudi Arabia along with tough statements from the US and Iran are increasing concerns that tensions may continue to escalate in the region.
Mr. Tony Sycamore – Market analyst at IG said that the latest drone attacks are a clear warning sign of the risk of widespread instability for Middle Eastern energy infrastructure.
According to him, if the US or Israel continues to have more military moves against Iran, the risk of retaliatory attacks targeting energy facilities and strategic infrastructure in the Gulf region will increase.
UAE officials said they are investigating the origin of the attack on the Barakah nuclear power plant, and affirmed that the country has full rights to respond to actions that threaten national security.
Meanwhile, Saudi Arabia confirmed that it had intercepted three unmanned aerial vehicles entering Iraqi airspace and announced that it would deploy necessary measures to protect national sovereignty and security.
According to Axios, President Donald Trump is expected to meet with top national security advisors on Tuesday to discuss options related to Iran.
In another development, the US administration last weekend expired the sanctions immunity mechanism that once allowed some countries, including India, to continue purchasing Russian oil for shipping by sea after a month-long extension.
Analysts believe that this move may also contribute to supporting oil prices in the short term as the market is concerned that global supply continues to tighten.
