Oil prices gained more than 3% on Wednesday after Iran and the U.S. military traded airstrikes and Washington reimposed crude sales sanctions on Tehran, raising fears their fragile truce was unravelling and
Oil prices gained more than 3% on Wednesday after Iran and the U.S. military traded airstrikes and Washington reimposed crude sales sanctions on Tehran, raising fears their fragile truce was unravelling and Middle East supplies could be disrupted again.
Brent crude futures LCOc1 gained $2.40, or 3.2%, at $76.56 a barrel at 0645 GMT. U.S. West Texas Intermediate crude CLc1 climbed $2.26, or 3.2%, to $72.70 a barrel.
Both benchmarks rose about 3% on Tuesday after the U.S. revoked the general licence authorising the sale of Iranian crude.
"While the revocation doesn't fundamentally change oil market dynamics, it's important from a sentiment perspective. It heightens the risk of a breakdown in the temporary deal between the U.S. and Iran," ING commodity strategists said on Wednesday.
The U.S. airstrikes were in response to Iranian attacks on three commercial vessels that were transiting the Strait of Hormuz, U.S. Central Command said on Tuesday. Iran's Revolutionary Guards then said they targeted U.S. military sites in Bahrain and Kuwait early on Wednesday.
"The current conflagration is a reminder to the market of how fragile passage through the Strait still is," said Saul Kavonic, head of research at MST Marquee.
"This presents a contrary indicator
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