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Oil rises as Iran strike reports stoke risks in Strait of Hormuz
US and global benchmark crude futures climbed more than 1% in post-settlement trading as traders also weighed shifting prospects for shipping through the strait.
Oil prices extended their gains after an Iranian news agency said the Islamic Republic struck hostile targets in the Strait of Hormuz, according to LiveMint Markets citing Bloomberg. US and global benchmark futures contracts rose more than 1% in post-settlement trading Thursday.
Traders’ moves followed earlier intraday gains for West Texas Intermediate and reflected growing concern that a potential Iran and Oman deal may not quickly restore full oil shipments through the waterway. Reports also said Iran would seek to bar US and Israeli vessels from using the strait and require compensation from hostile countries, which market participants read as a sign that Persian Gulf exports could stay restricted near term.
The developments also pushed European natural gas futures sharply higher, with prices rising as much as 12% on the Fars news agency report of strikes, reflecting tanker risk repricing. The report added to uncertainty around talks on proposed shipping lanes, with Iran saying the pact was in the final stages but also signaling normalization could depend on lifting a US blockade on Iranian ports.
Even with signals that negotiations could lead to some resolution, oil remained under pressure this week after Iran and the US indicated a deal was close earlier. LiveMint Markets also notes the UK Navy reported that a tanker heard two explosions while transiting the strait, underscoring lingering threats to shipping in the Middle East.
Latest closeNat gas $2.620 ▼2.5%