Oil rises after US launches fresh strikes against Iran

Synopsis

Oil prices increased on Thursday following new U.S. strikes against Iran. These actions have diminished hopes for peace and the Strait of Hormuz reopening. Brent and West Texas Intermediate crude futures saw notable gains in early trading. Shipowners are expected to adopt a more cautious approach to voyages through the strait. Insurance providers are reviewing policy terms after recent vessel attacks.

Oil prices rose on Thursday after the U.S. launched fresh strikes against Iran, denting hopes for an end to the Iran war and for the full reopening of the Strait of Hormuz, a chokepoint for one-fifth of pre-war global oil supplies.

Brent crude futures rose ‌78 cents, ⁠or 1% ⁠to $78.8 a barrel by 0054 GMT. U.S. West Texas Intermediate crude futures were up 74 cents, or 1.01%, at $74.26 a barrel.

Both crude benchmarks, WTI and Brent, rose more than a dollar in post-settlement trade on Wednesday after the U.S. military began launching fresh strikes on Iran.

Before that, the benchmarks had settled at their highest in over two ⁠weeks after ‌U.S. President Donald Trump threatened fresh strikes against Iran as soon as Wednesday night.

The U.S. military said it was ⁠launching fresh strikes on Iran aimed at keeping the critical Strait of Hormuz open to traffic, hours after President Donald Trump declared that an interim agreement to end the war was "over".

The rush of oil that passed through the strait in recent weeks is over for now, with shipowners expected to take a more cautious stance, IG analyst Tony Sycamore said in a ‌note.

The U.S. said its latest round of attacks was in response to Tuesday's assault on three tankers transiting the strait. The U.S. attacks rattled ⁠several cities along Iran's southern coast and left some areas without power.

Iran said on Wednesday it attacked U.S. military sites in Bahrain and Kuwait in response to earlier U.S. strikes on infrastructure.

Some war underwriters have advised shipping companies to pause voyages through the Strait of Hormuz, and others are reviewing their policy terms after Iran's renewed vessel attacks, insurance industry sources said on Wednesday.

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