Oil prices grew again after US strikes on Iran And attacks on ships near the Strait of Hormuz. Brent rose above $76 per barrel.
Oil prices went up after new American strikes on Iran and reports of attacks on commercial ships in the Strait of Hormuz. The market again remembered that a significant part of the world’s oil supplies passes through this narrow sea artery.
American WTI oil rose by about 2.87%to $72.46 per barrel, and Brent added about 2.75%rising to $76.18 per barrel. According to ReutersUS Central Command announced a series of strikes against Iran following attacks on three commercial ships passing through the Strait of Hormuz.
CENTCOM called Tehran’s actions “unwarranted and dangerous” aggression and said attacks on merchant ships violated the ceasefire. The Iranian side, in turn, accuses the United States of escalation and claims that it will defend its interests. Well, yes, another round of Middle Eastern “stability”, where everyone claims that they are only responsible, and for some reason oil is becoming more expensive.
Why does the market react this way?
The Strait of Hormuz remains one of the most important points of global energy. Any threat to shipping in the area is almost immediately priced into oil as traders begin to consider not only current supplies, but also the risk of disruptions, ship insurance, freight and possible military escalation.
According to The Guardianoil prices rose sharply amid new US strikes, threats around Hormuz and worsening expectations for energy stability. Reuters also notes that the risk to supplies through Hormuz has become one of the main factors in rising prices.
For consumers, this means a simple chain: more expensive oil means more expensive fuel, transportation, and some goods and services. And then, as usual, inflation pretends that no one invited it, but it is already sitting at the table and asking for more.
US increases pressure on Iran
In addition to the military strikes, Washington revoked an exception that allowed Iran to sell oil under previous relaxations. Writes about this The Business Timesindicating that the decision was a new blow to the fragile ceasefire and increased pressure on Tehran.
The US logic is clear: limit Iran’s oil revenues and show that attacks on shipping will have a cost. But this creates a double risk for the market: on the one hand, a reduction in the supply of Iranian oil, and on the other, the threat of new attacks on infrastructure and ships.
The Joint Maritime Information Center has reportedly raised the threat level for shipping in the Hormuz area to serious following attacks on three commercial vessels. This means that fear of further incidents now becomes part of the price of each barrel.
What does this mean for markets?
If escalation remains limited, prices may stabilize after the first spike. But if attacks on ships continue or the US and Iran trade more strikes, the market will quickly price in a higher war premium.
The danger is not only in oil as a commodity. Rising energy prices could bring back inflationary pressure, complicate central bank decisions and hit bond markets. Investors are already watching not only the barrel, but also how rising energy costs could affect the policy of the US Federal Reserve.
“Athens News” previously wrote that the Strait of Hormuz remains one of the main risk points for the global economy: even a partial disruption of tanker traffic can dramatically change expectations for oil, fuel and inflation. Strait of Hormuz: why markets are afraid of its closure.
Main conclusion
Brent’s rise above $76 is not just a reaction to one military episode. This is a signal that the market is again building in the risk of great instability in the area through which the critical flow of global oil passes.
So far we are talking about increased nervousness, and not about complete energy shock. But if the Hormuz attacks continue and the US and Iran launch a new series of strikes, oil prices could get a much stronger boost. In a world where one strait can ruin the inflation forecasts of half the planet, the word “local conflict” sounds more and more mocking.
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