Brent Jumps on Fresh US Strikes Against Iran

Brent surged above $76 per barrel on Wednesday and was up more than about 6% so far this week, after the US military carried out fresh air strikes in Iran and revoked a waiver that had allowed the country to sell crude on global markets. The actions followed a series of recent attacks on vessels transiting the Strait of Hormuz, including a Qatari LNG carrier and a Saudi oil tanker. The renewed conflict has put the interim US-Iran peace agreement at risk and raised the prospect of fresh disruptions to global energy supplies by deterring shipowners and regional producers from using the vital waterway. The escalation marks a sharp reversal from earlier expectations of a supply glut, after OPEC+ increased production quotas and Middle Eastern producers moved to ramp up output.

Brent extended its gains on Tuesday, rising about 6% to around $76 per barrel as geopolitical tensions in the Middle East intensify. A US official told CNBC that the Treasury Department is revoking the waiver allowing Iran to sell its oil after recent attacks on tankers in the Strait of Hormuz. According to Qatar’s Ministry of Foreign Affairs, Iran attacked the Qatari LNG tanker Al-Rekayyat and another tanker transiting the strait was reportedly struck by an unidentified projectile. Iran’s foreign minister said that final peace negotiations would not move forward as long as security threats persist. President Trump warned that the two countries would either reach an agreement or the US would "finish the job," renewing the prospect of military action. Meanwhile, Saudi Aramco cut the official selling price of its Arab Light crude for Asian buyers by $1.10 per barrel for next month, widening the discount to $1.50 below the regional benchmark amid softer market conditions.

Brent crude oil approached $74 a barrel on Tuesday after attacks on commercial shipping in and around the Strait of Hormuz heightened concerns over more disruptions to global energy supplies. The incident renewed concerns among shipowners and raised questions over the durability of the US-Iran agreement aimed at preventing attacks in the strategic waterway. Also, the Iranian Foreign Minister said that final peace negotiations would stall if geopolitical threats persist. Still, oil remained near its lowest level since late February, as growing supply expectations continued to weigh on the market. Reports indicated that at least eight Japan-linked vessels exited Hormuz via a route near Iran, including five supertankers capable of transporting 2 million barrels of crude each. Meanwhile, Saudi Aramco cut the price of its Arab Light crude for Asian buyers next month by $11 per barrel, widening the discount to $1.50 below the regional benchmark amid softer market conditions.