Audio By Carbonatix
Oil prices climbed nearly 2% on Wednesday after the U.S. military launched airstrikes against Iran and reimposed crude sales sanctions, raising fears their fragile truce was unravelling and Middle East supplies could be disrupted again.
The U.S. airstrikes were in response to Iranian attacks on three commercial vessels that were transiting the Strait of Hormuz, U.S. Central Command said on Tuesday. The strait is a key waterway for the transport of Middle Eastern oil shipments to wider markets.
Brent crude futures gained $1.38, or 1.9%, to $75.54 a barrel, and U.S. West Texas Intermediate crude climbed to $71.81 a barrel, up $1.37, or 1.9% at 0128 GMT.
Both benchmarks rose about 3% on Tuesday after the U.S. revoked the general licence authorising the sale of Iranian crude following the Iranian attacks.
"The current conflagration is a reminder to the market of how fragile passage through the Strait still is," said Saul Kavonic, head of research at MST Marquee.
"This presents a contrary indicator to the prevailing sentiment that the market could be flooded into oversupply, which may scare some of the record short positioning to cover," he said.
He added that if tensions persist and traffic through the waterway remains below 50% of pre-war levels, the resulting supply constraints could support higher oil prices.
After the U.S. and Iran signed their truce agreement last month, oil prices tumbled back to pre-war levels and traders amassed large short positions in oil futures, or bets that prices would fall further.
Expectations of a wave of pent-up Middle East supply coming onto the market caused the price declines.
Iran did not take responsibility for the vessel attacks but Qatar blamed Iran for them, including one on a Qatari liquefied natural gas tanker, which reported being struck by a drone that caused a fire in its engine room.
A Saudi-flagged crude oil tanker, believed to be the supertanker Wedyan, was also damaged off Oman, maritime security sources said. The cause was not immediately clear.
The attacks renewed concerns about tanker traffic through the Strait of Hormuz, which carried cargoes equal to about one-fifth of global energy supply before the war began in February.
Iran is asserting its control of the Strait and has ordered ships to use a route closer to its coast rather than one nearer to Oman, which also borders the waterway. The U.S. insists that the waterway must remain free to all, as it was before the conflict began.
Since the war started, nations have drawn down their inventories to make up for the supply shortfall.
U.S. crude oil inventories fell again last week, market sources said on Tuesday, citing data from the American Petroleum Institute. Analysts polled by Reuters had expected crude stockpiles to decline by about 2.4 million barrels in the week ended July 3. ,
Latest Stories
-
Freddie Blay alleges Mahama ordered demolition of son’s Polo Beach Club at La Beach
8 minutes -
‘We’ve complied with all the rules’ – NPP assures transparency in national elections
19 minutes -
‘Who is financing all this?’ – Victoria Bright questions networks behind Ghana-linked drug trade
25 minutes -
If we don’t know Baffour Awuah’s charge, there’s a fishing expedition going on – Kofi Bentil
32 minutes -
Parliament questions continued detention of Baffour Awuah by EOCO, demands due process
1 hour -
Baffour Awuah did not report to EOCO voluntarily; an arrest warrant forced him – Theophilius Dzimega
1 hour -
Baffour Awuah case risks looking like a display of state power – Sulemana Braimah
1 hour -
Campaign posters, billboards take over Kumasi as NPP goes to polls
2 hours -
‘I’ve been told I’m also involved’ – John Darko says he’ll cooperate with EOCO if invited over Baffour Awuah case
2 hours -
Follow the evidence, not assumptions, in Baffour Awuah case – Victoria Bright
2 hours -
48-hour detention rule is not an automatic entitlement for EOCO – Victoria Bright
2 hours -
Baffour Awuah’s arrest is a political witch-hunt – Kofi Bentil
2 hours -
MT Asharami Ghana arrives in Tema as government pushes stronger LPG infrastructure
3 hours -
Weweso JHS wins 5th edition of Otumfuo Reading Competition 2026
3 hours -
‘Criminal law can’t turn every poor commercial judgment involving state entity into an offence’ – Victoria Bright
3 hours