ALBAWABA - Oil prices surged on Wednesday and continue to trend upward as the U.S. and Iran renew strikes on each other.
It seems that the war will not be over quickly, as major breaches of the MoU took place on Wednesday, it started when Iran hit three vessels in the Strait of Hormuz, a Qatari LNG tanker named ‘Al Rekayyat’, along with a Saudi Supertanker ‘Wedyan’, and another unidentified vessel.
There has been no official statement from Iran on why it hit those tankers, as it has not claimed responsibility for the attacks, though some speculate that the reason was that the tankers did not use Iran’s northern corridor in the Strait of Hormuz to transit; others say that the Qatari tanker came too close to Iranian Navy teams clearing mines in the strait.
Whatever the reason, the U.S. reply was swift. First, the U.S. revoked the sanction waiver on Iran, the waiver that allowed them to trade oil freely through the Strait without using a shadow fleet. This was enough to cause prices to soar on its own. However, it didn’t stop there.
Next, the U.S. hit over 80 military targets in southern Iran, targeting the small boats that Iran used in order “to degrade Iran’s ability to continue attacking international commerce,” according to the U.S.
In response to this, Iran targeted 85 U.S. military sites in the Gulf; in Bahrain and Kuwait; reasserting their claim of controlling the strait.
Trump's remarks during the NATO summit in Ankara drove oil prices even higher surging to $78 a barrel - the highest level in two weeks - and rapidly rising. When before that it hovered around $72 a barrel, close to its pre-war value; the recent attacks having thrown doubts on whether the MoU ceasefire would hold between Iran and the U.S. with Trump saying "I think it's over."
While oil rose, the rest of the markets seemed to shrug off the war, indicating market exhaustion from the on-off relationship that the U.S. and Iran share. Most markets were focusing on tech and AI rather than the repetitive Gulf conflict.
