Oil jumps by more than 5% after mutual attacks between America and Iran economy

Oil prices jumped by more than 5% in trading on Wednesday, driven by escalating military tensions between the United States and Iran, and Washington tightening sanctions on Iranian oil exports, which revived concerns about the security of supplies in the Middle East and supported crude gains.

Brent crude futures rose by $3.9, or 5.3%, to reach $78.1 per barrel at the time of writing the report, while US West Texas Intermediate crude rose by $3.5, or 5.1%, to $74.15 per barrel, after the two crude oils recorded gains of about 3% in Tuesday’s session.

The rises came after the United States canceled a license allowing the sale of Iranian crude oil, coinciding with an exchange of attacks between the two sides, as the US Central Command announced that its strikes on Iran came in response to attacks that targeted 3 commercial ships in the Strait of Hormuz.

The Iranian Armed Forces threatened that any site that allows the United States to attack Iran will be a “legitimate target,” and a statement from Khatam al-Anbiya’s headquarters said, “Every support provided to the aggressive American army in order to violate the sovereignty of Iran’s Islamic lands will be a legitimate target for the Armed Forces.”

The United States canceled the general license issued on June 21 allowing the sale of Iranian oil for a period of 60 days, following attacks targeting oil tankers in the Strait of Hormuz, while Brent crude oil continued to rise in today’s trading.

The US Treasury Department’s Office of Foreign Assets Control issued a decision on Tuesday prohibiting any new transactions with Iranian oil from July 7 or later.

She explained that the decision cancels the temporary license issued on June 21 that allowed the production, supply and sale of Iranian crude oil, petrochemicals and petroleum products.

A previous version of the license was issued after the interim peace agreement, and allowed transactions for 60 days, until August 21.

Axios quoted an American official as saying that the Iranian Revolutionary Guard targeted a third commercial ship in the Strait of Hormuz, while the British Maritime Trade Operations Authority said that it had received a report about a new incident involving an oil tanker in the Strait.

The American NBC network also quoted an American official that the Revolutionary Guard targeted a commercial ship with a drone near Hormuz, and that the American army shot down several drones launched by Iran, noting that Tehran attacked two ships at night with two missiles that traveled a short distance at high speed.

According to the Joint Maritime Information Center, 3 incidents occurred targeting gas and oil tankers east of areas in the Sultanate of Oman and east of Khor Fakkan in the Emirates, while the center announced that the threat level in the Strait of Hormuz was raised to “severe,” and spoke of the continuation of Revolutionary Guard attacks, radio calls from ships, and drone activity.

On June 18, Washington and Tehran signed a memorandum of understanding, and are continuing difficult negotiations to reach a final agreement, mediated by Pakistan and Qatar.

The targeting of tankers near the Strait of Hormuz has returned the geopolitical risk premium to global energy markets.

The Strait of Hormuz is one of the most important energy corridors in the world, as approximately 20% of global oil consumption and large quantities of liquefied natural gas shipments passed through it daily before the war.

Oil and energy expert Hashem Akl believes, in a special comment to Al Jazeera Net, that the security developments in the Strait of Hormuz put global energy security, especially liquefied natural gas supplies heading to Europe, in direct confrontation with the risks of maritime shipping.

Oil prices increased by 3% yesterday, Tuesday, and then continued to increase after the settlement. Both crude oils recorded an increase of more than 5% upon settlement yesterday compared to the settlement prices the previous day.

In another context, data from the American Petroleum Institute showed, according to market sources, a decline in US crude inventories by 399 thousand barrels during the week ending July 3, while analysts polled by Reuters expected a larger decline of about 2.4 million barrels.