Oil Surges 6%

Crude oil prices surged 6% to $74.5 a barrel on Wednesday as escalating tensions in the Middle East fueled concerns over further supply disruptions. President Trump said that as far as he is concerned, the ceasefire is over while the US launched strikes on Iran and revoked a waiver that had allowed the country to sell crude. 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. Tehran also said it had targeted 85 US military sites in Bahrain and Kuwait in response to what it described as US violations of the ceasefire. The renewed conflict 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.

Crude oil surged above $72 per barrel on Wednesday and was up more than 5% 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. Tehran also said it had targeted 85 US military sites in Bahrain and Kuwait in response to what it described as US violations of the ceasefire. 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.

Crude oil extended its gains on Tuesday, rising about 5% to around $72 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.