SINGAPORE, July 13 — Oil prices jumped today as Iran expanded strikes on Gulf states following attacks by the United States, threatening energy shipments via the Strait of Hormuz.
Brent crude futures climbed US$2.34, or 3.08 per cent, to US$78.35 by 2311 GMT, while US West Texas Intermediate crude rose US$2.21, or 3.09 per cent, to US$73.62 a barrel.
Over the weekend, Tehran extended strikes on Qatar and the United Arab Emirates while the US launched further strikes on Iran, the latest in a cycle of attacks and counter-attacks over shipping through the strait.
US President Donald Trump yesterday said the Strait of Hormuz is open to commercial traffic, although Iran declared earlier that it closed the strait after a vessel travelled on an unapproved route and was struck.
Six vessels transited the strait yesterday, shiptracking data from Kpler showed, the fewest in five weeks.
The escalating attacks have cast further doubt on the future of an interim US-Iranian agreement signed last month that aimed to reopen the strait and end the war after another 60 days of negotiations.
Following the agreement, global oil supply rose by 4.1 million barrels per day (bpd) in June, but remained 9.4 million bpd below pre-war levels, the International Energy Agency said in its monthly report on July 10.
“Hopes of a relatively quick resolution to the recent skirmishes may be in doubt after tension escalated over the weekend,” ANZ analysts said in a note.
IG market analyst Tony Sycamore said the relatively tame rise in oil prices suggested the market is taking the view that the current flare up is an escalation in a fragile truce and falls well short of a complete collapse of the ceasefire.
“How accurate that view is remains to be seen,” he said in a note.
