Oil prices jumped 5% after Trump's statement about "ending" the deal with Iran
Kyiv • UNN
Brent and WTI crude futures surged to a two-week high on fears of supply disruptions. The US revoked the license for Iranian oil, and Iran struck US facilities.
Oil prices surged more than 5% on Wednesday, hitting a two-week high after US President Donald Trump said the memorandum of understanding on ending the conflict with Iran was "completed," reigniting fears of disruptions to Middle East oil supplies, UNN reports citing Reuters.
Details
Brent crude futures rose by $3.82, or 5.15%, to $77.98 per barrel as of 08:32 GMT (11:32 Kyiv time), while US West Texas Intermediate crude rose by $3.70, or 5.25%, to $74.14 per barrel. These levels are the highest since June 23.
Both benchmarks gained about 3% on Tuesday after the US revoked a general license for Iranian oil sales.
The US revoked the license that allowed the sale of Iranian oil07.07.26, 23:15 • 3640 views
Speaking ahead of the NATO summit in Ankara, Trump said the interim pact to end the war, initiated by the US and Israel against Iran in February, was "over," adding that he does not want to engage in dialogue with Tehran.
"The latest developments have effectively called into question the future of the 60-day negotiation process," said Bjarne Schieldrop, chief commodities analyst at SEB.
"In my view, a price near $80 per barrel is more in line with current market fundamentals than $70," he added.
US airstrikes were a response to Iranian attacks on three commercial vessels passing through the Strait of Hormuz, the US Central Command said on Tuesday. Iran's Revolutionary Guard then said it struck US military targets in Bahrain and Kuwait on Wednesday morning.
"According to PVM analyst Tamas Varga, four oil and gas tankers either decided not to pass through the strait or were forced to turn back after Iran said the only safe shipping route through the Strait of Hormuz is the one set by Tehran."
After the US and Iran signed a ceasefire agreement last month, oil prices fell to pre-war levels, and traders accumulated large short positions on oil futures, betting on further price declines.
Expectations of a wave of deferred supplies from the Middle East hitting the market caused prices to fall.
Iran did not claim responsibility for the attacks on the vessels, but Qatar blamed Iran for them, including an attack on a Qatari LNG tanker that was reportedly hit by a drone, causing a fire in the engine room.
The attacks have again raised concerns about tanker traffic through the Strait of Hormuz, which before the war began in late February carried about one-fifth of the world's energy supplies.
Since the start of the conflict, countries have drawn down their inventories to compensate for supply shortages.
US oil inventories fell again last week, market sources said on Tuesday, citing data from the American Petroleum Institute. Analysts polled by Reuters expected crude inventories to fall by about 2.4 million barrels for the week ending July 3.