Oil prices up nearly 3% as Israel-Iran conflict escalates, US response remains uncertain
Oil prices jumped almost 3% on Thursday as a week-old air war between Israel and Iran escalated and uncertainty about potential U.S. involvement kept investors on edge.
Brent crude futures settled up $2.15, or 2.8%, to $78.85 a barrel, its highest close since January 22.
U.S. West Texas Intermediate crude for July was up $2.06, or 2.7%, to $77.20 at 1330 EST (1730 GMT).
Trading volumes were light on Thursday due to a U.S. federal holiday.
Israel bombed nuclear targets in Iran on Thursday, and Iran fired missiles and drones at Israel after hitting an Israeli hospital overnight.
There was no sign of an exit strategy from either side, as Israeli Prime Minister Benjamin Netanyahu said Tehran’s "tyrants" would pay the "full price" and Iran warned against a "third party" joining the attacks.
The White House said on Thursday that President Donald Trump will decide whether the U.S. will get involved in the Israel-Iran conflict in the next two weeks.
That prospect has crude prices grinding higher, said Rory Johnston, analyst and founder of the Commodity Context newsletter.
"Consensus (in the market) is increasingly forming that we will see U.S. involvement in some way," Johnston said.
Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries, extracting about 3.3 million barrels per day of crude oil.
About 18 million to 21 million bpd of oil and oil products move through the Strait of Hormuz along Iran’s southern coast, and there is widespread concern the fighting could disrupt trade flows.
Source: Reuters
