Oil prices surge to $90/barrel amid intensifying US-Iran tensions

Iran's attacks on ships passing through the Strait of Hormuz outside the "IRGC-established corridor" led to the termination of the ceasefire agreement and the intensification of US strikes on facilities in Iran, as well as the closure of ship traffic through the Strait of Hormuz.

 

September Brent crude futures rose 15.8% to $88/barrel in a week (+22% in two weeks), and on Monday morning at the start of trading in Asia they had already crossed the psychological level of $90/barrel.

 

For more than 9 days, the US has been attacking military facilities and bridges in Iran, trying to isolate the area near the Strait of Hormuz from the Iranian military, and in response, Iran is intensifying attacks on neighboring countries, US military bases and civilian infrastructure in Kuwait, Jordan and Bahrain. At least two US service members have been killed in these attacks, so everyone is preparing for an intensification of US strikes and the resumption of a full-scale war in the Middle East, with Iran shelling ships in the Strait of Hormuz and neighboring countries.

 

The US administration is sending additional tanker planes to Israel, which could be a sign of expanded US military operations in the coming days.

 

It should be noted that Iran is not attacking Israel at all, as it has promised to retaliate by attacking both Iran's military leadership and its energy and civilian infrastructure.

 

The US launched new strikes on Iran on Friday (the sixth day in a row), hitting key targets. Kuwait said the Iranian strikes hit a desalination plant and a power plant, and damaged many power units.

 

The reduction in oil supplies through the Strait of Hormuz will remain a major factor supporting oil prices in the coming weeks.

 

According to the EIA report, as of July 10, US crude oil inventories were 6.2% lower than the 5-year seasonal average, gasoline inventories were 8.4% lower, and distillate inventories were 11.1% lower than the seasonal average.

 

These data and rising oil prices are once again pushing up fuel prices at gas stations in the US, so analysts expect a new wave of intensified strikes on Iran (possibly even seizing oil terminals on Hart Island) after the World Cup.