Oil prices rose on Thursday after the United States launched a new round of strikes against Iran, dimming hopes for a ceasefire and raising fresh questions about the continued passage of vessels through the Strait of Hormuz.
Brent crude futures were up 78 cents, or 1 per cent, to $78.8 a barrel at 0054 GMT. West Texas Intermediate added 74 cents, or 1.01 per cent, to reach $74.26 a barrel.
Both benchmarks had already climbed more than a dollar in post-settlement trading on Wednesday after the US military confirmed it had begun a new wave of attacks on Iran. Earlier in the session, the two contracts had settled at their highest levels in more than two weeks, following a threat by President Donald Trump to bomb Iran.
The US military said the strikes were intended to keep the Strait of Hormuz open to shipping, coming hours after Trump declared that a temporary agreement to end the war had “expired.”
Tony Sycamore, an analyst at IG, wrote in a note that oil flows through the Strait had effectively stopped in recent weeks and that shipowners were expected to adopt an increasingly cautious stance.
Washington said its latest strikes were a response to attacks on three tankers crossing the Strait on Tuesday. The American bombardment hit several cities along Iran’s southern coast and caused power outages in parts of the country.
Iran said on Wednesday it had struck American military sites in Bahrain and Kuwait in retaliation for earlier US attacks on its infrastructure.
War risk insurers advised shipping companies on Wednesday to suspend voyages through the Strait, while others moved to review the terms of their policies following renewed Iranian attacks on vessels.
