Oil prices rise as Trump threatens more Iran strikes, meets producers to boost supply
Oil prices rose Tuesday as President Donald Trump threatened further strikes against Iran and two tankers were reportedly hit near the Strait of Hormuz.
Trump is scheduled to meet Tuesday with oil producers as his administration works to increase output from the United States and Venezuela and offset potential losses tied to the conflict.
Oil prices rose by around 2% on Tuesday.
U.S. West Texas Intermediate crude was up $2.12, or 2.47%, to $87.88, while Brent crude futures (Mideast supply) were up $1.72, or 1.9%, to $92.21 a barrel.
“The tit-for-tat missile exchanges between the US and Iran bring validation to those who believe that even if not a ‘forever war,’ this conflict will run and run,” PVM analyst John Evans said.
The incidents came after the first direct exchanges of fire between the U.S. and Iran since late July, heightening concerns about disruptions to the global oil supply.
“Fresh hostilities between the U.S. and Iran raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz,” Saxo Bank analyst Ole Hansen said, adding a lack of follow-through buying suggests the market is betting on supply not being disrupted more than it is already.
The Strait of Hormuz
is a critical energy chokepoint through which roughly one-fifth of the world’s oil supply typically passes.
“The hopes that had emerged last week for an upcoming reopening of the Strait of Hormuz to shipping have been dealt a severe blow. The question is also whether, in the event of a renewed escalation, unofficial vessel traffic through the strait can continue unhindered,” Commerzbank analysts wrote.
Reuters contributed to this report.
Read the full article here
