The international price of oil recorded a new increase this Wednesday, driven by the intensification of the conflict between the US and Iran and the growing uncertainty about maritime transit in the Strait of Hormuz, one of the main routes for global crude oil trade.
Texas Intermediate Oil (WTI), a reference for the US market, rose 0.78% during the first operations of the day and reached US$79.69 per barrel, once again approaching the US$80 barrier, a level that had not been observed since mid-June.
The main factor behind the rally is the new US military offensive against Iranian targets. US Central Command (Centcom) reported that it carried out strikes for approximately 90 minutes against coastal defense systems and missile launch platforms on Great Tunb Island in the Persian Gulf.
According to Centcom, the operation sought to reduce Iran’s ability to attack commercial maritime traffic transiting the Strait of Hormuz.
The strategic importance of this route explains the markets’ reaction. Before the war, around a quarter of the world’s maritime oil trade transited through the Strait of Hormuz, so any threat to its operation generates concern among investors and energy operators.
Analyst Tom Essaye, author of the report The Sevens Reportnoted that energy continues to be the main focus of attention in raw materials markets due to the resurgence of geopolitical tensions in the Middle East, a situation that has caused a strong rebound in oil futures contracts during the week.
The escalation also sparked a new diplomatic confrontation. Iran’s Deputy Foreign Minister Kazem Gharibabadi accused the US of reneging on the memorandum of understanding that sought to end the conflict and said Washington has “teared up” that deal. In addition, he defended Iran’s right to exercise sovereignty over the Strait of Hormuz for reasons of national security.
Tensions rose after the US resumed the naval blockade against Iran and continued attacks on Iranian territory. In response, the Iranian Revolutionary Guard launched new missiles and drones against US bases in Bahrain, Kuwait and Jordan, and warned that the Strait of Hormuz will remain closed as long as Washington’s military actions continue.
The situation also began to affect maritime transport. According to the International Maritime Organization, several oil tankers were attacked in the Strait of Hormuz since Monday night, events that left at least two people dead and several injured. At the same time, the United Nations expressed its concern about the economic and humanitarian consequences that a prolonged blockade of this strategic route for international trade would have.