Risk premium for oil returns as US-Iran tensions rise

Singapore

A RISK premium has returned to oil markets with a vengeance, boosting global price benchmarks as escalating fighting in Iraq threatens supplies while political tensions loom between the United States and Iran.

After months of range-bound trading during which supply cuts led by the Organization of the Petroleum Exporting Countries (Opec) supported crude prices but rising US output capped markets, prices have moved up significantly this month just as demand looks stronger than at any point in recent months, especially in China.