Global oil prices spike on Wednesday

Global oil prices edged up further in early trading on Wednesday, with both benchmarks about 0.5 percent higher as of 03:30 GMT.

US stocks fell on the rising geopolitical tensions overnight, with the benchmark S&P500 and tech-heavy Nasdaq Composite declining 0.84 percent and 0.91 percent, respectively.

Iran is OPEC’s third-largest producer extracting about 3.3 million barrels per day (bpd) of crude oil, but analysts say other members of the Organization of the Petroleum Exporting Countries could use their spare capacity to make up for a drop in Iranian output.

Markets are also looking ahead to a second day of U.S. Federal Reserve discussions on Wednesday, in which the central bank is expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range.

Israel has bombed multiple oil and gas facilities in Iran since Friday, including the South Pars gasfield, the Fajr Jam gas plant, the Shahran oil depot and the Shahr Rey oil refinery.

While there has been little disruption to global energy flows so far, the possibility of escalation – including direct US involvement in Israel’s military offensive – has put markets on edge.