Oil Prices Increase 2% Following US Strikes on Iran, Brent Crude Reaches $96 per Barrel
Oil Prices Surge Amid Escalating US-Iran Tensions
Oil prices climbed around 2% in early trade on Thursday, driven by reports of fresh US strikes on an Iranian military facility, despite ongoing negotiations between Washington and Tehran aimed at ending their three-month conflict.
The price of Brent crude futures advanced $1.90, or 2.02%, to $96.19 per barrel, while the more actively traded August contract rose $1.64, or 1.78%, to $93.89 per barrel. The July contract, which is scheduled to expire on Friday, saw a smaller gain of $1.73, or 1.95%, to trade at $90.41 per barrel.
| Contract | Price Change | New Price |
|---|---|---|
| Brent Crude Futures | $1.90 (2.02%) | $96.19 |
| August Contract | $1.64 (1.78%) | $93.89 |
| July Contract | $1.73 (1.95%) | $90.41 |
| US West Texas Intermediate Crude Futures | $1.73 (1.95%) | $90.41 |
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
The escalation of tensions comes after President Donald Trump expressed dissatisfaction with the ongoing negotiations and the White House rejected an Iranian report claiming that Tehran and Oman would jointly oversee the Strait of Hormuz under a proposed draft agreement.
According to reports, the US launched fresh strikes in Iran targeting a site considered a threat to American forces and maritime traffic in the strait. This is the latest in a series of attacks on locations near Hormuz, which has been a major sticking point in the negotiations.
Despite the escalating tensions, crude oil prices remain on track for a second consecutive weekly decline amid hopes that both sides may still reach at least an interim agreement. However, key issues persist, including Iran's nuclear program and Tehran's insistence on maintaining control over the Strait of Hormuz, which continues to face a dual blockade by Iran and the US.
President Trump reiterated that the US would not lift sanctions on Iran, conflicting with Tehran's demands for an end to military attacks and economic relief. The president is also under pressure from Republican hardliners to continue the conflict, which has now entered its fourth month after breaking out in late February.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Investor Takeaway
Oil prices may fluctuate in response to geopolitical tensions.
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