Oil nears $80 as renewed US-Iran tensions rattle markets
What's the story
Oil prices surged on Thursday, following fresh US military strikes on Iran. The action has raised concerns over possible supply disruptions in the Middle East. Brent crude futures for September delivery rose by 1.03% to $78.82 a barrel while West Texas Intermediate futures for August increased by 1.06% to $74.29 per barrel.
Military action
US strikes Iran over attacks on commercial shipping
The US Central Command confirmed on Wednesday that fresh strikes on Iran were launched in retaliation to Tehran's attacks on commercial shipping in and around the Strait of Hormuz. President Donald Trump also indicated earlier in the day that he was no longer interested in negotiating a deal with Iran. He said that the ceasefire deal between Iran and the US was "over."
Market response
Strait of Hormuz crucial for global oil supply
The ongoing tensions have prompted the market to consider the risk of renewed attacks on shipping or a wider breakdown in US-Iran relations. Saxo Bank noted that such scenarios could delay normal flow through the Strait of Hormuz, one of the world's most critical energy chokepoints. Even a small disruption here can significantly affect prompt pricing, freight costs, and overall market sentiment.