Oil prices jumped Tuesday after the U.S. struck Islamic Revolutionary Guard Corps targets in Iran, the first exchange of strikes between the two countries in over a month. West Texas Intermediate hit its highest level since July 24, while Brent crude rose above $93 a barrel amid renewed threats to shipping through the Strait of Hormuz.
WTI hits levels not seen since July
Crude oil extended gains Tuesday as tensions escalated in the Middle East. U.S. West Texas Intermediate futures added 3.7% to $89.41 a barrel, the highest level since July 24. Brent crude, the international benchmark, rose 3.8% to $93.89 a barrel.
The moves came after U.S. Central Command confirmed that American forces began striking Islamic Revolutionary Guard Corps targets in Iran, following attempted IRGC attacks on commercial shipping in the Strait of Hormuz and on American service members in the region.
Tanker struck, bases hit in retaliation
A tanker transiting Hormuz on Monday was struck by three unknown projectiles, according to the U.K. Maritime Trade Operations Centre. The vessel was sailing in the southern shipping lane near the Omani coast, and no casualties were reported.
Iran launched an attack on two American bases in Jordan on Monday in retaliation for the U.S. strike on its Larak Island. American forces had targeted two Iranian rocket launchers on Larak Island on Sunday, reportedly killing three, saying Tehran intended to launch rockets carrying sea mines into the Hormuz Strait. Larak Island sits in the strait and has been a critical military and shipping control point for Iranian forces.
Iranian President Masoud Pezeshkian told the Shanghai Cooperation Organisation Summit on Tuesday that Tehran would immediately reciprocate if Washington agreed to return to its commitments under the interim deal signed in June, according to the Iranian Student News Agency.
Both sides signal readiness to respond further
The exchange marked the first time the U.S. and Iran traded strikes in over a month. Neither side appeared to be seeking full-scale war, but both signaled they were prepared to respond to further attacks. According to CNBC: "We are going to hit them hard," President Trump told Fox News on Monday, adding there would be a response to Iran's attacks on U.S. bases.
Analysts largely view the strike on Larak Island as an attempt to break a deadlock rather than a shift in strategy. Ali Vaez, deputy program director at International Crisis Group, said the U.S. appears to be punishing a specific behavior rather than, at least for now, broadening its war aims by hitting the launchers rather than broader Iranian military infrastructure. Jason Brodsky, policy director of United Against Nuclear Iran, said the strikes enforce the blockade, adding that the Trump administration's goal was to further degrade Tehran's ability to mine the Strait of Hormuz while leaning on economic coercive measures as the midterm elections approach.
Source: CNBC
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