Iran’s foreign minister responds to Trump and attacks the US
Iran’s foreign minister Abbas Aragchi said at a press conference that the US had “crossed the very big red line” in the airstrikes.
- Oil prices have skyrocketed to their highest levels since January following a joint US-Israel attack on Iran’s nuclear facilities.
- Concerns over Iran’s potential retaliation, including closing the Strait of Hormuz, the main oil transport route, have driven prices spikes.
- Analysts acknowledge an increase in geopolitical risks, but some believe that price surges are temporary without actual supply disruptions.
SINGAPORE – Oil prices jumped local time on Monday, with Washington’s weekend joining Israel from January, with Iran’s nuclear facilities joining Israel to attack supply concerns.
Brent crude futures rose $1.88 or 2.44% at 1122 GMT. US West Texas intermediate crude increased by $1.87 or 2.53% at $75.71.
Both contracts increased by more than 3% early in the session, reaching $81.40 and $78.40 for eight months, respectively.
Prices rose after President Donald Trump said he had taken part in Israel’s attacks in the Middle East as he “eliminates” Iran’s major nuclear sites on a strike over the weekend and Tehran vowed to protect himself.
Iran is the third largest crude oil producer in OPEC.
Market participants are hoping for further price increases amid increasing fears that Iran’s retaliation could include the closure of the Strait of Hormuz.
Iran’s news television has reported that the Iranian parliament has approved measures to close the channel. Iran has threatened to close the straits in the past, but has never continued to move.
“The risk of damage to petroleum infrastructure… has increased,” said June Go, senior analyst at Spartan Products.
There are alternative pipeline routes from this region, but if the Strait of Hormuz is inaccessible, there are still coarse volumes that cannot be fully exported. She added that shippers will become increasingly away from the area.
Since the conflict began on June 13th, Brent has risen 13%, while WTI has risen about 10%.
The current geopolitical risk premium is unlikely to last without concrete supply disruptions, analysts said.
Meanwhile, the rewinding of the long positions that have accumulated following the recent price rally was written by All Hansen, head of product strategy at Saxo Bank, in Sunday’s market commentary.
(Reporting by Siyi Liu of Singapore, edited by Himani Sarkar)
