Global oil prices rose today, Thursday, immediately after the issuance of sharp statements by US President Donald Trump, in which he confirmed that the United States would strike Iran “very strongly tonight,” suggesting that his country would soon control the oil and gas infrastructure and markets in the Middle Eastern country.
The intensity of military actions between Washington and Tehran escalated rapidly. Iran’s joint military command announced the complete closure of the Strait of Hormuz to oil tankers and commercial ships, threatening to target any ship that attempts to cross. This Iranian action came after the United States launched additional strikes, and Trump pledged to continue the attacks unless a peace agreement was reached.
In terms of trading, Brent crude futures rose by 46 cents, or 0.5 percent, to reach $93.56 per barrel. US West Texas Intermediate crude also gained about 65 cents, or 0.7 percent, to trade at $90.68 per barrel.
Despite this rise, analysis channels indicated that the weakness of Chinese demand for fuel (gasoline and diesel) and the decline in Beijing’s imports of crude oil, contributed relatively to curbing the record rises led by the Iran crisis.
On the other hand, three Iranian sources and a European official revealed to Reuters that Washington and Tehran exchanged extensive messages about the details of a “memorandum of understanding” after reaching an initial political understanding. However, some thorny issues are still under in-depth research, most notably the mechanism for releasing billions of dollars of frozen Iranian funds.
Sujin Kim, an analyst at MUFG Financial Group, commented: “The recent escalation adds uncertainty to the already fragile ceasefire negotiations, and creates real risks from continued supply disruptions that have restricted global oil, fuel and liquefied natural gas exports since the outbreak of the conflict.”
