The plan for two gunboats to pass through the Suez Canal en route to Syria is a "provocation," according to Avigdor Lieberman. Concerns rose about oil shipments from the Middle East being disrupted increased as anti-government protests manifested in Libya, Bahrain and Yemen.
"This is the latest addition to the Middle East risk premium," Phil Flynn, vice president of research at PFGBest in Chicago, told Bloomberg. "This is a knee-jerk reaction to the headlines that Iran is planning to send two warships through the Suez Canal."
Shortly before 1 p.m. on Wednesday, Brent crude oil futures were up 2.07 percent, a $2.10 increase to $103.74 per barrel.
Five days after anti-government protests in Egypt forced president Hosni Mubarak from office after 30 years of rule, Egypt finds itself in transition. Israel had expressed concern about Iran capitalizing on this period.
"The tension in the Middle East is having a greater impact on the Brent market," Todd Horwitz, chief strategist at Adam Mesh Trading Group in New York, told the news service. "This has a much bigger impact on Europe, we don't get as much oil from the Middle East."