Oil gains after US strikes Iranian missile sites

Oil prices have moved higher following reports that the US Central Command (CENTCOM) has struck missile sites in southern Iran, rekindling market concerns of a prolonged US-Iran standoff.

IMAGE: Flags of the US and Iran. Getty Images

The US military action, described as defensive, came a day after Brent crude’s price slipped below the $100/bbl mark on expectations of a peace deal between Washington and Tehran.

The airstrikes targeted Iranian sites near the Strait of Hormuz, including missile launch sites and vessels attempting to lay naval mines in the region, US CENTCOM spokesperson Tim Hawkins told Fox News.

“U.S. forces conducted self-defense strikes in southern Iran today to protect our troops from threats posed by Iranian forces,” Hawkins said.

Iranian media reported explosions near Bandar Abbas, although the cause was not immediately identified.

The attack coincides with advancing efforts to reach a peace deal, with Iran’s parliamentary speaker Mohammad Bagher Ghalibaf and foreign minister Abbas Araghchi travelling to Qatar to push negotiations toward a final stage.

Meanwhile, Iran is expected to clear mines from the Strait of Hormuz within 30 days, restoring commercial vessel movement through the critical transit, Nikkei reported citing a Middle East diplomatic source.

Market participants will remain focused on any development in the Middle East conflict until the Strait of Hormuz is completely open to vessel traffic. However, further military action is expected to push oil prices higher once again, according to analysts.

“Key red lines for both parties have yet to be addressed. The fate of Iran’s nuclear program is still to be addressed,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

By Aparupa Mazumder

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