Oil prices moved sharply higher on Wednesday after the United States carried out new strikes on Iran and President Donald Trump said the ceasefire between the two countries was effectively finished.
West Texas Intermediate crude for August delivery gained 5.2% to $74.13 a barrel, while Brent crude for September delivery rose 5.2% to $78.04 a barrel. The move followed the latest escalation in tensions tied to attacks on commercial ships in the Strait of Hormuz.
Shipping attacks and retaliation
According to the report, the U.S. military said its strikes were a response to Iranian attacks on three commercial vessels passing through the strategic waterway. U.S. Central Command said the attacks were dangerous and violated the ceasefire agreement reached last month, which had helped reopen the Strait of Hormuz to commercial traffic after months of disruption.
Trump made his remarks during a press conference with NATO chief Mark Rutte in Ankara, saying he did not want to continue dealing with Iran and viewed further negotiations as pointless. The U.S. Treasury Department also withdrew a waiver that had allowed Iran to sell oil, while Iran’s foreign ministry described the strikes as a violation of the agreement and said its armed forces would defend the country if needed.
The Joint Maritime Information Center said three vessels were attacked in or near the strait on Tuesday and raised its threat assessment for ships using the route to severe. The developments also pushed the 10-year Treasury yield slightly higher, with strategists warning that renewed conflict in the region could add to inflation pressures.
Source: cnbc.com
