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Oil rises after exchange of airstrikes between Iran and the United States
Oil prices jumped more than 2% on Thursday after Iran’s Revolutionary Guard announced it had targeted a US air base in response to an earlier American attack in the city of Bandar Abbas.
Brent crude futures rose by $2.38, or 2.52%, to $96.67 per barrel by 08:45 GMT, while the more actively traded August contract climbed by $2.45, or 2.66%, to $94.70 per barrel. The July contract is set to expire on Friday.
US West Texas Intermediate crude also rose by $2.24, or 2.53%, to $90.92 per barrel.
Markets pull back from peace deal optimism
The two benchmark crude contracts had fallen more than 5% in the previous session to their lowest levels in a month amid hopes that the United States and Iran could reach an agreement to end the war and reopen the Strait of Hormuz.
However, hours after US President Donald Trump denied reports suggesting he was nearing a settlement agreement with Tehran, Iran’s Revolutionary Guard announced it had targeted a US air base following American strikes against an Iranian drone operation near the Strait of Hormuz, according to a US official.
John Evans, analyst at PVM Oil Associates, said the exchange of airstrikes appeared to be part of the “language of negotiation” between the two sides.
He added that prices may remain volatile as long as hopes for an agreement persist, until falling global inventories begin to have a more visible impact on the market and remind traders of the scale of oil supplies trapped behind the Strait of Hormuz bottleneck.
Tankers leave the strait with tracking systems switched off
Shipping data from LSEG and Kpler showed that two very large crude carriers and one liquefied natural gas tanker left the Strait of Hormuz this week after switching off their tracking systems and are currently heading toward India and China.
US inventories decline
In the United States, data from the American Petroleum Institute showed crude oil inventories fell by 2.8 million barrels last week, marking the sixth consecutive weekly decline.
Official inventory data from the US Energy Information Administration is scheduled for release on Thursday after being delayed by one day due to the Memorial Day holiday on Monday.
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