Oil rises to seven-month high on Iran risk

International oil prices advanced as tensions in the Middle East escalated after the United States signaled it may launch airstrikes on Iran. Demand for safe-haven assets also strengthened, pushing gold prices higher.

On Feb. 19 local time, North Sea Brent crude futures on ICE Futures Europe in London rose 1.9 percent to close at $71.66 per barrel, the highest level since July 31 of last year. U.S. West Texas Intermediate futures climbed by the same margin, settling at $66.43 per barrel. Compared with Jan. 7, when prices stood at $55.99, WTI has surged 18.6 percent.

Analysts warn that if Washington escalates military pressure on Tehran, Iran could retaliate by attempting to block the Strait of Hormuz, a vital artery for Middle Eastern crude exports. Approximately one-third of global oil supplies transit through the narrow waterway, underscoring the market’s sensitivity to any disruption.

Choi Jin-young, an analyst at Daishin Securities, said, “If a blockade of the Strait of Hormuz materializes, roughly 10 percent of global crude export volumes could be directly disrupted, adding further upward pressure on prices.”

Rising international oil prices are likely to feed into domestic gasoline and diesel costs. Global crude price movements typically reach South Korean gas stations with a lag of about two weeks. According to Opinet, the oil price information system operated by the Korea National Oil Corp., retail gasoline and diesel prices had declined for 10 consecutive weeks through the second week of February, covering Feb. 9 to 13, before ticking up in the third week, from Feb. 16 to 20.

Gold, traditionally viewed as a safe-haven asset, also resumed its upward climb. On the New York Mercantile Exchange, gold futures dipped to $4,905.90 per ounce on Feb. 17 before rebounding to reach $5,000 in intraday trading on Feb. 20. Goldman Sachs said major central banks are expanding their gold holdings as a safeguard against rising geopolitical risks.


지민구 warum@donga.com