The United States is also closely monitoring the situation.
Officials have signaled that they may release oil from the country’s strategic petroleum reserves if prices continue to rise or if supply shortages become severe.
Strategic reserves are emergency oil stocks that governments maintain to stabilise markets during major supply disruptions.
At the same time, Washington has temporarily allowed India to continue purchasing some Russian crude oil that was already at sea, in order to reduce pressure on global energy supplies.
Iran signals it is not seeking negotiations
Meanwhile, diplomatic tensions remain high. Iran’s Foreign Minister Abbas Araghchi recently said that the country is not currently seeking negotiations, indicating that the situation could remain tense for some time.
The ongoing conflict between the United States, Israel and Iran has raised fears that the crisis could spread further across the Middle East.
Since the region produces a large portion of the world’s oil and gas, any wider conflict could have serious effects on global energy markets.
Energy facilities and production disruptions
Reports suggest that several oil refineries and liquefied natural gas (LNG) facilities in the region have already been forced to shut down due to security concerns.
These shutdowns have further reduced energy production, adding to worries about supply shortages.
Energy companies and shipping firms are also becoming cautious about sending tankers into high-risk areas, which is slowing down the movement of oil and gas shipments.
Global financial markets react
The surge in oil prices has also started to affect global financial markets.
European stock markets declined on Friday, while US stock futures also slipped as investors worried about the economic impact of rising energy costs.
Higher oil prices often lead to higher fuel prices, which can increase inflation and slow down economic growth.
When businesses spend more on fuel and energy, it can raise the cost of goods and services, affecting consumers around the world.
Why oil prices react strongly to Middle East tensions
The Middle East plays a critical role in the global energy system. Many of the world’s largest oil producers are located in the region, including Saudi Arabia, Iran, Iraq, Kuwait, and the United Arab Emirates.
Because of this, conflicts in the region often cause immediate reactions in global oil markets.
Even small disruptions in supply can push prices higher, as countries compete to secure enough oil to meet their energy needs.
Energy analysts say the future direction of oil prices will depend on how the situation in the Middle East develops. If the Strait of Hormuz remains blocked or if Gulf producers stop exports, global oil markets could face a serious supply shock.
(With inputs from agencies)