Shares in Shell and BP, two major oil-and-gas companies listed in London, are performing well, outpacing the FTSE 100 index, thanks to the increase in oil prices driven by escalating tensions in the Middle East.
At 0955 GMT, Shell’s shares have risen by 16.00 pence, or 0.6%, reaching 2,609.00 pence, while BP’s shares have increased by 5.25 pence, or 1.1%, reaching 477.20 pence. Over the past year, Shell’s shares have seen a 14% increase, and BP’s shares have risen by 2.4%.
The surge in oil prices is a result of concerns surrounding potential military conflicts in the Middle East and disruptions in global supply. The recent explosions at a ceremony in Iran, claiming the lives of nearly 100 individuals, were held to commemorate the four-year death anniversary of a prominent Iranian general who was killed by a U.S. drone strike in Iraq back in January 2020.
These tragic events have further intensified tensions in the region. Additionally, the ongoing Israel-Gaza war has caused disruptions to shipping routes in the Red Sea due to multiple attacks on vessels by Yemeni Houthi rebels.
“The region remains a tinderbox due to the Israel-Gaza war, and disruption to shipping routes through the Red Sea is also a key factor behind the surge in crude,” commented Russ Mould, the investment director at AJ Bell.
Concerns over tighter supply have been aggravated by the shutdown of Libya’s largest oil field due to local protests.
As of now, Brent crude is up by 1.06% at $79.06, while WTI crude has increased by 1.3% to $73.64.