Oil prices surged by more than 3% in Thursday trading after Iran’s Revolutionary Guard announced it had targeted a U.S. air base in response to an American attack near Bandar Abbas Airport, dampening market hopes for an imminent de-escalation.
Brent crude futures rose by $3.51, or 3.72%, to reach $97.8 per barrel, while the more actively traded August contract climbed $3.35 to $95.6 per barrel, ahead of the July contract’s expiration on Friday.
Meanwhile, U.S. West Texas Intermediate crude gained $3.31, or 3.73%, to reach $91.99 per barrel.
The sharp rebound came after both benchmark indices had fallen more than 5% in the previous session, touching their lowest levels in a month amid market optimism over the possibility of a U.S.-Iran agreement that could end the war and pave the way for reopening the Strait of Hormuz.
According to Tasnim News Agency, Iran’s Revolutionary Guard said it targeted the U.S. base following what it described as an American attack near Bandar Abbas Airport early Thursday, warning that any repeat of the “aggression” would be met with a “more decisive” response.
On the other hand, a U.S. official told Reuters that the American military carried out new strikes inside Iran targeting a military site believed to pose a threat to U.S. forces and commercial shipping traffic in the Strait of Hormuz.
Commenting on the developments, Daniel Hynes, commodity strategist at ANZ, said: “Oil supplies remain constrained, and the key points of disagreement between the two sides have yet to be resolved.”
The escalation coincided with data from the American Petroleum Institute showing that U.S. crude inventories fell by 2.8 million barrels last week, marking the sixth consecutive weekly decline, ahead of official data expected later Thursday from the U.S. Energy Information Administration.
Agencies
