1 hour ago
Brent was up 1.4% above $79 a barrel after jumping over 5% the previous day. Meanwhile, West Texas Intermediate was close to $74 a barrel.
2 Min Read
Oil prices extended their gains as the US attacked targets in Iran for the second consecutive day.
Brent was up 1.4% above $79 a barrel after jumping over 5% the previous day. Meanwhile, West Texas Intermediate was close to $74 a barrel.
US forces started additional strikes to degrade Iran’s ability to threaten freedom of navigation in the Strait of Hormuz, Central Command said. Tehran said it would launch a large retaliatory operation against US bases in the region.
On Wednesday, US President Donald Trump said the interim peace agreement with Iran was over, while raising the possibility of reimposing a blockade on the Islamic Republic’s ports. He also warned crude prices could rise further, and strikes may include a “take over” of the export hub at Kharg Island.
The US attacks were “retribution” for Iranian ship strikes, Trump said in a social-media post. “If it happens again, it will get much worse!” he wrote.
The global energy market has been jolted this week by the resurgence in fighting in the Middle East, with futures partially retracing some of the losses seen in the second quarter. The status of Hormuz — which connects Persian Gulf producers to global markets — lies at the center of the tensions, with the US launching attacks after a spate of strikes against commercial vessels.
After the war broke out in February with US and Israeli strikes, Tehran initially forced the near-total closure of Hormuz, spurring regional crude suppliers to shut-in oil fields as storage tanks hit capacity. The fresh hostilities will test suppliers’ ability to keep vessels crossing the chokepoint after traffic had picked up following the countries’ interim deal.
Earlier this week, the Treasury also revoked a sanctions waiver that had allowed Tehran to sell oil, reversing course on a key part of the interim deal. The agreement to lift sanctions saw millions of barrels of the country’s crude flood out of the gulf in recent weeks, much of which is now in limbo.
As the conflict drags on, stockpiles are coming under pressure. While US commercial crude holdings rose nearly 3 million barrels last week, a 6.2 million barrel draw from the Strategic Petroleum Reserves meant overall inventory posted a net fall of more than 3 million barrels, official data showed. In addition, distillate fuel oil stockpiles fell by 5 million barrels, and gasoline inventories hit the lowest seasonal level since 2012.
With inputs from Bloomberg
