- US reimposes sanctions against Iranian oil sales.
- Qatar blames Iran for attack on LNG tanker.
- Saudi-flagged oil tanker is also believed to be hit.
Oil prices rose more than 2% on Wednesday after the US military launched airstrikes against Iran and reimposed sanctions on crude sales, raising fears that their fragile ceasefire was unraveling and that supplies from the Middle East could be disrupted again.
Brent crude futures rose $1.92, or 2.6%, to $76.08 a barrel. barrel at 0400 GMT. US West Texas Intermediate crude rose $1.82, or 2.6%, to $72.26 a barrel. barrel.
Both benchmarks rose about 3% on Tuesday after the US revoked the general license allowing the sale of Iranian crude following the Iranian attacks.
“While the withdrawal does not fundamentally change oil market dynamics, it is important from a sentiment perspective. It raises the risk of a breakdown in the US-Iran Interim Agreement,” commodity strategists at ING said on Wednesday.
The US airstrikes were in response to Iranian attacks on three commercial vessels sailing through the Strait of Hormuz, the US Central Command said on Tuesday.
“The current fire is a reminder to the market of how fragile passage through the strait still is,” said Saul Kavonic, head of research at MST Marquee.
“This presents a counterindicator to the prevailing sentiment that the market may be awash in oversupply, which could scare off some of the record short positioning to cover,” he said, adding that if tensions persist and traffic through the waterway remains below 50% of pre-war levels, the resulting supply constraints could support higher oil prices.
After the United States and Iran signed their cease-fire deal last month, oil prices fell back to pre-war levels and traders amassed large short positions in oil futures, or bets that prices would fall further.
Expectations of a wave of pent-up supply from the Middle East hitting the market caused the price declines. Iran did not claim responsibility for the vessel attacks, but Qatar blamed them on Iran, including one on a Qatari liquefied natural gas tanker, which reported being hit by a drone that caused a fire in its engine room.
A Saudi-flagged crude oil tanker, believed to be the supertanker Wedyan, was also damaged off Oman, maritime security sources said. The reason was not immediately clear.
The attacks renewed concerns about tanker traffic through the Strait of Hormuz, which carried cargo equivalent to about a fifth of global energy supplies before the war began in February.
Iran asserts its control over the strait and has ordered ships to use a route closer to its coast rather than one closer to Oman, which also borders the waterway. The US insists that the waterway must remain free to all as it was before the conflict started.
Since the war started, nations have been drawing down their inventories to make up for the supply shortages.
U.S. crude inventories fell again last week, market sources said Tuesday, citing data from the American Petroleum Institute. Analysts asked by Reuters had expected crude inventories to fall by about 2.4 million barrels in the week ending July 3.
