Shafaq News
Oil prices climbed nearly 2% on Wednesdayafter the U.S. military launched airstrikes against Iran and reimposed crudesales sanctions, raising fears their fragile truce was unravelling and Middle East suppliescould be disrupted again.
The U.S. airstrikes were in response to Iranian attacks on threecommercial vessels that were transiting the Strait of Hormuz, U.S. CentralCommand said on Tuesday. The strait is a key waterway for the transport ofMiddle Eastern oil shipments to wider markets.
Brent crude futures gained $1.38, or 1.9%, to $75.54 abarrel, and U.S. West Texas Intermediate crudeclimbed to $71.81 a barrel, up $1.37, or 1.9% at 0128 GMT.
Both benchmarks rose about 3% on Tuesday after the U.S. revoked thegeneral licence authorising the sale of Iranian crude following the Iranianattacks.
"The current conflagration is a reminder to the market of how fragile passagethrough the Strait still is," said Saul Kavonic, head of research at MST Marquee.
"This presents a contrary indicator to the prevailingsentiment that the market could be flooded into oversupply, which may scaresome of the record short positioning to cover," he said, adding that iftensions persist and traffic through the waterway remains below 50% of pre-war levels, the resultingsupply constraints could support higher oil prices.
After the U.S. and Iran signed their truce agreement last month, oil prices tumbledback to pre-war levels and traders amassed large short positions in oilfutures, or bets that prices would fall further.
Expectations of awave of pent-up Middle East supply coming onto the market caused the pricedeclines.
Iran did not take responsibility for the vessel attacks butQatar blamed Iran for them, including one on a Qatari liquefied natural gastanker, which reported being struck by a drone that caused a fire in its engineroom.
A Saudi-flagged crude oil tanker, believed to be thesupertanker Wedyan, was also damagedoff Oman, maritime security sourcessaid. The cause wasnot immediately clear.
The attacks renewed concerns about tanker traffic throughthe Strait of Hormuz, which carried cargoes equal to about one-fifth of globalenergy supply before the war began in February.
Iran isasserting its control of the Strait and has ordered ships to use a route closer to its coast ratherthan one nearer to Oman, which also borders the waterway. The U.S. insists thewaterway must remain free to all as it was before the conflict started.
Since the war started, nations have drawn down theirinventories to make up for thesupply shortfall.
U.S. crude oil inventories fell again last week, marketsources said on Tuesday, citingdata from the American Petroleum Institute. Analysts polled by Reuters hadexpected crude stockpiles to decline by about 2.4 million barrels in the weekended July 3.
(REUTERS)
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