Oil prices increase following Iranian president's tragic death

Oil prices spiked on Monday after Tehran confirmed the deaths of Iranian President Ebrahim Raisi, Foreign Minister Hossein Amir-Abdollahian, and other officials in a helicopter crash in the country's northwestern province.

International benchmark Brent crude traded at $84.24 per barrel at 10.44 a.m. local time (0744 GMT), a rise of 0.31% from the closing price of $83.98 per barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $79.81 per barrel at the same time, a 0.29% increase from the previous session that closed at $79.58 per barrel.

The helicopter carrying the Iranian president, the country's foreign minister, and their entourage crashed in the East Azerbaijan region of northwest Iran on Sunday afternoon.

After a night-long search operation hampered by bad weather, Iranian Deputy President for Executive Affairs Mohsen Mansouri said in a statement on X that all onboard, including the president, foreign minister, accompanying delegation, and helicopter crew, had died.

Supply fears in favor of higher oil prices were stoked by worries about the political fallout in the oil-producing country and how it might affect decisions to be made at the June 1 meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+.

According to the latest OPEC report, over 3 million barrels of oil are produced daily in Iran.

Meanwhile, hope of the U.S. Federal Reserve's (Fed) starting interest rate cuts this year continues to influence oil prices.

With a current 65% probability rating for a Fed interest rate decrease in September, financial markets are beginning to reflect this forecast in pricing, while bolstering trade and prices as a weak U.S. dollar rate makes oil trade cheaper for other currency holders.

Furthermore, robust economic data from China, signaling high oil demand, is supporting price increases. The world's second-largest oil consumer and largest importer announced plans to start issuing subsidized bonds worth 1 trillion yuan last week.