Brent Crudes to Hit US$80, Energy Markets on Alert
Oil prices rose sharply on Wednesday (July 8th) after tensions between the United States and Iran escalated. Brent briefly surged more than 8% and broke through the US$80 per barrel area for the first time since June 22nd, before paring some of its gains.
At 3:55 p.m. ET (19:55 GMT), Brent for September delivery was still up 5.9% at US$78.55 per barrel. Meanwhile, West Texas Intermediate (WTI) for August delivery rose 5.1% to US$74.05 per barrel.
The oil price surge was triggered by a US retaliatory strike on more than 80 targets in Iran. US Central Command (CENTCOM) said the strikes targeted air defense systems, command networks, coastal radars, anti-ship missile capabilities, and more than 60 small boats belonging to the Iranian Revolutionary Guard Corps (IRGC) around the Strait of Hormuz.
The US strikes came after three commercial vessels, the M/T Al Rekayyat, M/T Wedyan, and M/T Cyprus Prosperity, were reportedly attacked near the Strait of Hormuz. Qatar and Saudi Arabia had previously identified the first two vessels hit. The Strait of Hormuz is a concern because it is one of the most important routes for global oil trade.
US President Donald Trump had previously stated that the ceasefire with Iran was "over" and that the US would likely strike again. However, oil prices later pared some of their gains after Trump, in a subsequent statement, said he did not believe a war with Iran would resume.
Although the gains eased slightly, the oil market remains on high alert. Iran warned through state media that the Strait of Hormuz could be closed if the US strikes again. If this threat materializes, global energy supplies could be disrupted, oil prices could remain high, and inflationary pressures could again cloud the global market. (arl)
Source: Newsmaker.id
