Oil rises amid renewed US-Iran confrontation
Brent crude’s price has risen above $100/bbl following a fresh confrontation between the US and Iran in the Strait of Hormuz, raising concerns that the month-long ceasefire could collapse.
IMAGE: Oil storage tanks. Getty Images
The US Central Command (CENTCOM) said in a statement that US forces intercepted “unprovoked” Iranian airstrikes yesterday and responded with “self-defense” strikes as the US Navy’s guided-missile destroyers – USS Truxtun, USS Rafael Peralta, and USS Mason – transited the Strait to the Gulf of Oman.
The US CENTCOM has “eliminated inbound threats and targeted Iranian military facilities responsible for attacking US forces including missile and drone launch sites,” it said.
Meanwhile, Iran's military has accused Washington of violating the ceasefire agreement by targeting two Iran-linked vessels in the Strait, as well as civilian areas, Reuters reported citing Tehran’s state-owned media.
The US has allegedly targeted an Iranian oil tanker in Iran's coastal waters near Jask toward the Strait of Hormuz and another vessel entering the Strait near the UAE port of Fujairah, the report added.
The latest escalation comes only days after Iranian strikes in Fujairah. US President Donald Trump also suspended Washington’s latest naval operation “Project Freedom” following the attack on targets in the UAE – Washington’s long-time ally.
“Crude oil prices suffered a rollercoaster rise as doubts emerged over US-Iran peace negotiations,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Meanwhile, Washington and Tehran are continuing discussions over a proposed one-page framework aimed at formally ending the conflict and reopening the Strait of Hormuz to commercial vessel movement.
How the two sides will overcome their deeper disagreements remains uncertain, according to market analysts. Growing optimism around a potential deal had triggered a sharp sell-ff in Brent’s price earlier this week.
“The US is still waiting for Iran to respond to its proposal to reopen the Strait of Hormuz and end the conflict that has upended the global oil market,” Hynes said.
By Aparupa Mazumder
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