Oil prices climbed above $111 per barrel on thursday as tensions in the middle east increased concerns about possible disruptions to global energy supplies

I think the biggest factor behind this rise is the growing risk of further military action against iran, as reports suggest that the US and israel are preparing plans for possible renewed strikes after next month's US midterm elections

I also think the latest houthi attacks on saudi targets are adding to market uncertainty, especially because any damage to oil infrastructure could affect production and create further pressure on global crude supplies

Another important factor is the US decision to order non-emergency government employees and their families to leave saudi arabia, which reflects growing security concerns across a region that plays a major role in global energy markets

I believe the strait of hormuz is another key area to watch, as a major disruption to shipping through this route could affect international oil supplies and push prices even higher

At the same time, US west texas intermediate crude has moved towards $100 per barrel, showing that concerns about the middle east are affecting the wider oil market and not just brent crude

I also think the situation could create additional inflationary pressure, as higher oil prices can increase fuel, transportation and manufacturing costs, eventually affecting businesses and consumers around the world

Another reason behind the market's reaction is the uncertainty surrounding diplomatic negotiations between the US and iran, as limited progress towards peace could keep geopolitical risks elevated for an extended period

However, I do not think oil prices will continue rising indefinitely just because tensions remain high, as the actual impact on production, exports and shipping will ultimately determine whether the current rally can be sustained

If military tensions escalate and oil supplies face serious disruptions, prices could move higher, but any meaningful progress towards de-escalation could reduce supply fears and lead to a correction

For now, I think the most important thing to watch is whether the rising geopolitical risks translate into real supply disruptions, because that could determine the next major move in crude oil prices