Oil Prices Rise Amid Renewed US-Iran Tensions
Oil prices rose by 1% on Wednesday due to renewed military strikes between the US and Iran, which have limited already impaired supplies. The conflict began in February with joint US-Israeli strikes on Iranian targets, and has since restricted traffic through the Strait of Hormuz, a critical waterway that carried about a fifth of global oil consumed before the conflict.
The US-Iran war is now in its seventh month, with the latest attacks representing the biggest exchange of fire between Tehran and Washington since July. The key concern for the oil market is whether the renewed fighting leads to another deterioration in physical flows through the region, according to Mark Schaefer, a director at brokerage Liquidity Energy.
Iran has effectively shut down shipping traffic in the Strait of Hormuz, with only four commodity vessels transiting the strait on Wednesday, below the 10-day average of around 13. The Islamic Revolutionary Guard Corps said the US attacks would further restrict traffic through the strait.