Brent crude prices surged over $1 per barrel on Thursday in a turbulent trading session as investors shifted focus between escalating US confrontations with Iran and hopes for a potential resolution to resume shipping through the Strait of Hormuz. Brent futures climbed $1.48, or 1.63 percent, reaching $92.22 per barrel by 0707 GMT. Concurrently, US West Texas Intermediate (WTI) crude saw a rise of 43 cents, or 0.51 percent, hitting $84.89 per barrel.
Following a significant daily price surge of 7 percent to 8 percent on Wednesday due to heightened tensions between the US and Iran following an Iranian missile attack on a US base in Jordan, both contracts rebounded slightly after early losses. The US Central Command confirmed carrying out two hours of attacks on Iran at 8:00 p.m. ET (0000 GMT) in response to the escalating situation.
In a notable development, the US, in collaboration with Saudi Arabia, conducted air strikes on Iran-backed paramilitary forces in Iraq, marking Saudi Arabia’s public involvement in US air operations for the first time. This retaliation was prompted by drone attacks on Saudi oil facilities originating from Iraq, ending a period of relative calm in US-Iran hostilities that began over the previous weekend.
Market analyst Vandana Hari of Vanda Insights noted that European markets reacted to the news of the US attacks by increasing buying activity. Additionally, the Caspian Pipeline Consortium announced the suspension of oil loadings following a drone attack on a tanker, impacting oil supply dynamics.
Despite the immediate spike in prices driven by Trump’s strong rhetoric, analysts point out that market movements are influenced by actual supply flows and diplomatic efforts. The market’s reaction to geopolitical events typically results in short-lived price spikes, with actual supply dynamics and diplomatic initiatives playing a crucial role in determining the sustainability of price increases.
An encouraging development was reported by Iran’s Fars news agency, indicating that a Qatari LNG tanker successfully navigated the Iran-designated route in the Strait of Hormuz with Iran’s approval. The Al Areesh tanker, which departed from Qatar’s Ras Laffan terminal in early July, exited the strait on July 29, as per Kpler and LSEG data.