Oil prices jump 2% as US attacks Iran
What's the story
Oil prices exhibited mixed trends on Tuesday, amid US military operations in southern Iran and President Donald Trump's ambiguous statements regarding the ongoing negotiations between Tehran and Washington. The international benchmark Brent crude saw its July futures rise by 1.6% to $97.72 per barrel during Asian trading hours. Meanwhile, US West Texas Intermediate's June futures fell sharply by 5.4% to trade at $91.38 per barrel.
Military action
US military confirms strikes in southern Iran
The US military has confirmed that it carried out "self-defense strikes in southern Iran today." The operations targeted vessels allegedly attempting to lay mines and missile launch sites. According to a statement from the US Central Command, these actions were aimed "to protect our troops from threats posed by Iranian forces."
Diplomatic tension
Trump complicates peace talks
President Trump has complicated the peace talks by revealing on social media that he had urged Saudi Arabia, Qatar, Pakistan, Turkey, Egypt and Jordan to join the Abraham Accords. The accords are aimed at normalizing ties between Arab nations and Israel. Despite this, Trump claimed that negotiations with Iran were "proceeding nicely," but warned of potential military action if discussions collapse. "It will only be a Great Deal for all or, no Deal at all," he wrote.
Market analysis
UBS warns of global oil market strain
Swiss multinational investment bank UBS has observed increasing signs of strain in the global oil market. This comes as inventories continue to dwindle amid disruptions to shipments via the Strait of Hormuz. The bank noted that observed global oil inventories fell by a total of 246 million barrels in March and April, with total production losses potentially exceeding 1 billion barrels by the end of May.