An oil tanker was seized by Iran early Thursday in the Gulf of Oman. According to Iran's state media, the seizure came as a result of a court order. The vessel, formerly known as the Suez Rajan, was at the center of a dispute between the U.S. and Iran in the past. The ship, now called the St Nikolas, is owned by Athens-based Empire Navigation, as reported by TankerTrackers, a private maritime intelligence service.

This incident has intensified concerns about escalating tensions in the Middle East, especially after months of attacks on shipping routes in the Red Sea by Yemen-based Houthi rebels. As a result, oil prices have spiked, with Brent crude increasing by 2.2% to $78.48 a barrel and West Texas Intermediate rising by 2.5% to $73.12 a barrel.

The seizure of the ship also raises the possibility of retaliatory U.S. strikes, as it further heightens tensions in a region already concerned about the potential expansion of the conflict between Israel and Hamas. Both Iran and Saudi Arabia are significant producers of oil.

Despite this recent increase, oil prices have remained relatively low over the past three months due to expectations of ample supply and weakening demand. Economic growth is expected to be sluggish. In an attempt to stabilize prices, the Organization of the Petroleum Exporting Countries (OPEC) has reduced output quotas, but some members have resisted this move. Angola even left the bloc late last year.

On Thursday, shares of major oil companies saw slight increases. Exxon Mobil rose by 0.5% shortly after the market opened, Chevron was up 0.8%, and Shell and BP both gained similar amounts. In addition, the S&P 500 experienced a 0.3% increase.

In summary, the seizure of the oil tanker by Iran has amplified tensions in the Middle East, leading to concerns of potential conflict and its impact on global oil prices. The situation remains uncertain as geopolitical factors continue to shape the oil market.

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