Oil prices rose sharply on Wednesday (July 8th) after the United States military announced it had launched new strikes against Iran. These strikes were in response to attacks on ships passing through the Strait of Hormuz, a vital route for global energy trade.
US President Donald Trump also stated that the fragile ceasefire between Washington and Tehran may be “over.” This statement heightened market concerns that the US-Iran conflict could escalate and threaten oil supplies from the Middle East.
At 4:46 a.m. Eastern Time (08:46 GMT), Brent crude rose 5.5% to US$78.24 per barrel. Meanwhile, West Texas Intermediate (WTI) rose 2.9% to US$72.49 per barrel. This increase indicates the market has again factored a geopolitical risk premium into oil prices.
US Central Command (Centcom) stated that the strikes were carried out to inflict a “heavy price” on Iran for the attacks on commercial shipping. According to the US, three commercial vessels transiting the Strait of Hormuz were targeted by Iran, leading Washington to believe Tehran had violated the ceasefire.
In addition to the military strikes, the US has also re-tightened pressure on Iran by revoking permits that previously allowed Iranian oil sales. This move exacerbates supply risks, as the easing of Iranian oil exports was a key part of the interim agreement between the two countries.
This oil surge could have widespread impacts on global markets. If disruptions in the Strait of Hormuz continue, energy prices could remain high and rekindle inflation concerns. This situation could potentially force central banks, including the Fed, to maintain a tighter stance for longer, while stock markets and risk assets could be under pressure again.
Source: Newsmaker.id