Oil prices climbed on Thursday after President Donald Trump threatened to bomb Iranian infrastructure if Tehran attacks ships in the Strait of Hormuz. Iran answered that it would hit U.S.-linked energy assets across the region. The exchange revived fears over crude supply through the Strait of Hormuz.
Crude extended its rally as Trump's threat raised the risk of wider conflict in a corridor where supplies have already been disrupted. Brent crude futures for September delivery gained 2% to $95.99 per barrel. U.S. West Texas Intermediate futures advanced around 1.7% to $88.27 per barrel.
Trump's ultimatum over Hormuz
Trump on Wednesday threatened to bomb and destroy one Iranian bridge or power plant each time Iran fires on a ship in the strait. Iran responded that it would retaliate against U.S.-linked infrastructure and energy assets across the region if Washington carried out the strikes. An unnamed Iranian military source told state-run Tasnim News Agency that Iran would strike bridges and energy facilities where the United States holds interests.
Diplomacy still in doubt
Secretary of State Marco Rubio said on Wednesday that Iran was not being serious about reaching an agreement with Washington, while insisting the U.S. remained committed to diplomacy in the Middle East.
HSBC said the rally in oil reflects renewed concerns over the Strait of Hormuz after the breakdown of the U.S.-Iran ceasefire, warning that the outlook now hinges on whether diplomacy can restore predictable shipping flows. Analyst Kim Fustier noted the ceasefire has frayed since early July as Iranian attacks on vessels prompted U.S. retaliatory strikes. Fustier said the core question over who administers passage remains unresolved: “The core issue remains unresolved: whether passage is administered, and by whom.”
Source: CNBC
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