Geopolitical tensions in the Middle East are causing international oil prices to rise sharply. The price of Dubai crude, a benchmark for Middle Eastern oil, has surpassed $100 per barrel for the first time in four months, raising concerns within domestic industries. Prolonged high oil prices could lead to increases in fuel, raw materials, energy, and logistics costs, thereby heightening the cost burden on companies.
According to industry sources, international oil prices have been rapidly increasing this week. The price of Dubai crude, which serves as the basis for domestic oil imports, jumped 4.43% to $109.75 per barrel, marking a five-month high.
The global benchmark, Brent crude, also crossed the $100 mark. On the London ICE Futures Exchange, November Brent crude closed at $101.21 per barrel, up 3.36% from the previous trading day. This is the first time oil prices have exceeded $100 since July 23.
The primary driver of rising oil prices is geopolitical instability in the Middle East. As the U.S. midterm elections approach, tensions between Iran and the U.S. have intensified, leading to disruptions in shipping through the Strait of Hormuz. According to Reuters, as of September 9, only seven vessels passed through the Strait, down from 12 the previous day and half the recent ten-day average of 14 vessels.
Meanwhile, the Iran-backed Houthi rebels have attacked energy facilities in southern Saudi Arabia, increasing uncertainty regarding oil production and transportation in the region.
The rise in international oil prices is also increasing cost pressures on domestic industries. Companies that directly use oil, as well as those in manufacturing with high energy and transportation costs, are affected. An increase in oil prices can raise the costs of petroleum products and petrochemical raw materials, which can then lead to higher logistics and production costs, spreading cost pressures across various sectors.
The shipping industry is among the most directly impacted sectors. Rising oil prices lead to higher bunker fuel costs, increasing operational expenses for shipping companies. Additionally, uncertainties in the Strait of Hormuz may result in detours and higher insurance premiums, further adding to costs.
The steel industry is also closely monitoring the situation. Domestic steelmakers import a significant portion of their key raw materials, such as iron ore and coking coal, so rising oil prices can increase maritime transportation costs, adding to their cost burden. Furthermore, if energy costs for operating steel mills rise, production cost pressures will increase even more.
The secondary battery industry is not immune to rising costs either. Some materials used in separators, such as polyethylene (PE) and polypropylene (PP), are linked to petrochemical raw material prices, meaning prolonged high oil prices could increase cost pressures.
Industry experts are watching the sustainability of the current rise in oil prices. While short-term price increases can be absorbed through inventory management or adjustments in selling prices, sustained high prices above $100 per barrel could limit companies' ability to respond.
An industry representative stated, "The duration of high oil prices is a greater burden for companies than short-term spikes. Given the current challenging market conditions, it is difficult for companies to fully pass on increased costs to product prices, which could further strain profitability."
* This article has been translated by AI.
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