2 days ago
Oil Rises as US Strikes Iranian Launchers Near Hormuz
Oil prices went up after fighting between the United States and Iran became more intense.
The US said it attacked Iranian launchers that were preparing to put mines in the Strait of Hormuz.
Iran reportedly fired missiles at US forces in Jordan, but the missiles were intercepted.
The Strait of Hormuz is an important waterway for moving oil around the world.
Millions of barrels of oil are still passing through it each day, although shipping is limited.
Traders are worried that more fighting could disrupt these supplies.
Oil prices have already moved sharply during this conflict.
The United States is also making plans involving Venezuelan oil and its emergency reserve.
Brent crude rose 1.23% to $89.18 a barrel, while WTI gained 1.10% to $84.32.
The US military struck Iranian rocket launchers preparing to deploy mines in the Strait of Hormuz on Sunday.
Iran reportedly launched attacks against US forces in Jordan, with missiles intercepted and no major damage reported.
An estimated 6 million to 8 million barrels of crude continue moving through Hormuz each day despite the conflict.
Washington is pursuing a proposed 100-year concession covering 17 Venezuelan oil fields to replenish its emergency reserve.
- Who
- The United States and Iran are involved, with US forces in Jordan also targeted; oil traders and shipping companies are monitoring the situation.
- What
- The US struck Iranian rocket launchers near the Strait of Hormuz, Iran reportedly retaliated, and crude prices rose.
- Where
- The fighting involved the Strait of Hormuz, an Iranian island or launch sites, and US forces stationed in Jordan.
- When
- The US strike occurred Sunday, with oil prices rising on Monday; the conflict has continued for nearly six months.
- Why
- The US said the launchers were preparing to deploy mines in the waterway, raising concerns about shipping and global oil supplies.
US Security Rationale
Escalation Concerns
Strikes near Hormuz
US Security Rationale
The US military said it targeted launchers that were preparing to deploy mines, while US officials said mines had been cleared and shipping lanes were open.
Escalation Concerns
Analyst Chris Weston said the direct attack on Iranian launch sites does little to advance negotiations and could deepen the conflict.
Iranian response
US Security Rationale
The reported missile attacks against US forces in Jordan were presented as retaliation following the US strike.
Escalation Concerns
The attacks add to risks around the conflict and could threaten confidence in continued oil shipments through Hormuz.
Impact on oil prices
US Security Rationale
Renewed fighting has pushed crude prices higher because traders are concerned about disruptions to Middle Eastern supplies.
Escalation Concerns
Weston said there appeared to be limited appetite to push crude materially higher, noting that the initial rise had seen little follow-through.
Key facts
- Brent price
- $89.18 per barrel after a $1.08, or 1.23%, increase.
- WTI price
- $84.32 per barrel after a 92-cent, or 1.10%, increase.
- Strait of Hormuz flows
- An estimated 6 million to 8 million barrels of crude are still moving through the waterway daily.
- US strike
- US forces targeted Iranian rocket launchers reportedly preparing to deploy mines.
- Iranian retaliation
- Several missiles were reportedly intercepted near US forces in Jordan, with no major damage reported.
- Oil market volatility
- Brent futures have fluctuated within a range of nearly $17 during the month.
- Venezuelan oil plan
- The proposed US concession would cover more than 65 billion barrels of reserves across 17 fields for 100 years.
Quotes
Chris Weston
Head of research at Pepperstone Group Ltd.
“The direct attack on Iranian launch sites does little to advance talks, and neither will Iran firing back at Jordan.”
livemint.com
“But there seems little appetite, at this stage, to push crude materially higher”
livemint.com
Sources
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