Oil nears $80 with Hormuz back in focus
Oil prices surged more than 4% on Monday after Iran widened its military strikes to Gulf states following fresh attacks by the United States, raising
Oil prices surged more than 4% on Monday after Iran widened its military strikes to Gulf states following fresh attacks by the United States, raising concerns over the security of energy shipments through the Strait of Hormuz.Crude oil price on July 13Brent crude futures advanced $3.34, or 4.38%, to $79.5 a barrel, while U.S. West Texas Intermediate (WTI) crude gained $3.07, or 4.30%, to $74.20 a barrel. The latest rally comes after both benchmarks climbed 5.5% last week, with WTI once again trading above $74 a barrel. European natural gas futures also rose 2.5% after markets reopened following the weekend.Over the weekend, Tehran expanded its strikes to Qatar and the United Arab Emirates, while the United States carried out another round of attacks on Iran, marking the latest escalation in the cycle of retaliatory strikes linked to shipping through the Strait of Hormuz.The U.S. Central Command said it launched fresh strikes at 5 PM Eastern Time on Sunday, saying the action was aimed at holding Iran accountable for attacks on commercial vessels passing through the strait.Also read: US-Iran war: Oil flow through Hormuz rises after ceasefire, but fresh strikes spark fears, IEA saysThe renewed rise in crude prices comes after oil had surrendered all of its gains from the Iran conflict following the signing of a memorandum of understanding between the United States and Iran on the sidelines of the G7 summit in France last month.
The agreement included provisions to end the conflict and ensure the safe passage of commercial vessels through the Strait of Hormuz.The latest flare-up now threatens efforts to rebuild depleted global oil inventories later this year, according to the International Energy Agency's statement issued on Friday, before the latest round of attacks.U.S. President Donald Trump said on Sunday that the Strait of Hormuz remains open for commercial traffic. Iran, however, had earlier declared the waterway closed after a vessel travelling on what it described as an unapproved route was struck.The latest escalation has also clouded the future of the interim agreement signed by the United States and Iran last month, which sought to reopen the strait and bring the conflict to an end after a further 60 days of negotiations.According to the International Energy Agency's monthly report released on Friday, global oil supply increased by 4.1 million barrels per day in June following the agreement. Even so, production remained 9.4 million barrels per day below pre-war levels.Read more: Global headwinds to cap rupee gains through 2026: ET PollWill prices rise further?Analysts said the market remains on edge.
The BriefWire