Oil prices surge by more than 7% after Trump declares that attacks on Iran would persist
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Following President Donald Trump's declaration that the United States would keep attacking Iran, oil prices increased by
almost 7% on Thursday, raising concerns about long-term interruptions to the oil supply.At 0902 GMT, Brent crude futures were up $7.65, or 7.6%, to $108.81 a barrel. At $107.18 per barrel, U.S. West Texas Intermediate crude futures were up $7.06, or 7.1%.
Although they were still behind the highs of $119 per barrel seen earlier in the war, both benchmarks were headed for the largest daily gains in three weeks, both in absolute and percentage terms.
The gains came after both contracts had lost more than $1 prior to Trump's nationally televised speech.Over the next two to three weeks, we're going to strike them really hard," Trump declared. "We're going to bring them back to the Stone Ages where they belong."
He provided no information on any actions that would result in the Strait of Hormuz reopening.
According to Priyanka Sachdeva, senior market analyst at Phillip Nova, the lack of a "clear mention of ceasefire or diplomatic engagement" in the address is causing markets to react.Oil might reach new highs as markets factor in possible supply disruptions if hostilities escalate or marine hazards rise.
He provided no information on any actions that would result in the Strait of Hormuz reopening.
According to Priyanka Sachdeva, senior market analyst at Phillip Nova, the lack of a "clear mention of ceasefire or diplomatic engagement" in the address is causing markets to react.Oil might reach new highs as markets factor in possible supply disruptions if hostilities escalate or marine hazards rise.
As the battle escalates, threats to marine transportation have increased. According to Qatar's defense ministry, an Iranian cruise missile struck an oil tanker leased to QatarEnergy in Qatari seas on Wednesday.
Due to the inability to access ports inside the Strait of Hormuz, some market participants claimed they had stopped dealing with cargoes priced off the Dubai Middle East benchmark, which is typically used to value about a fifth of the world's crude supply.
The president of the International Energy Agency also cautioned that, although the region had been protected by cargoes contracted prior to the start of the war, supply disruptions would begin to impact Europe's economy in April.
Due to the inability to access ports inside the Strait of Hormuz, some market participants claimed they had stopped dealing with cargoes priced off the Dubai Middle East benchmark, which is typically used to value about a fifth of the world's crude supply.
The president of the International Energy Agency also cautioned that, although the region had been protected by cargoes contracted prior to the start of the war, supply disruptions would begin to impact Europe's economy in April.
The international community's and Iran's reaction to President Trump's push to secure the Strait, which hasn't yet happened, will be the next crucial signal for markets, according to a note from Rystad.
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