Oil prices rise 5.5% after Iran attacks 3 ships and US retaliatory strikes

Over the past two days, Iran has attacked three commercial vessels in the Strait of Hormuz that were traveling a “non-coordinated” route with the IRGC.

 

This came after the expiration of a week-long agreement between the US and Iran to stop attacks in the Strait of Hormuz, which allowed Iran to bury Ali Khamenei and the US to celebrate Independence Day.

 

The IRGC military attacked a Qatari gas tanker and a Saudi oil tanker near the coast of Oman as they exited the Strait of Hormuz. Axios also previously reported that Iran fired at least two missiles at commercial vessels passing through the strait.

 

The US called such actions by Iran "absolutely unacceptable" and said they "will have consequences." And today, the US Central Command reported that the US military had launched a series of strikes on Iran, which, according to analysts, were the strongest since the 60-day ceasefire began.

 

September Brent crude futures, after falling to their lowest level since the start of the Middle East war on June 1, rose 2.8% yesterday to $74/barrel, and this morning rose another 2.7% to $76/barrel following the US decision to revoke the general license for oil exports recently issued to Iran.

 

Recall that crude oil prices fell on June 1 after Saudi Arabia cut the price of its light crude oil for Asian customers for delivery next month by $11/barrel, while the market expected a price decrease of $8/barrel.

 

According to Vortexa, the volume of crude oil stored on tankers that are idle for at least 7 days increased by 39% to 112.1 million barrels in the week of June 27-July 3. This indicates an increase in the supply of official oil and the refusal of buyers to purchase “sanctioned” oil stored on tankers.

 

Rising oil prices and the resumption of the Gulf War in the coming week will provide speculative support to grain and oilseed prices.