US-Saudi Strikes Spark Crude Oil Price Surge Amid Iran Tensions

Crude oil futures surged on Wednesday morning after joint strikes by the US and Saudi Arabia against Iran-backed targets in Iraq. The US Central Command announced that precision strikes were conducted against multiple terrorist logistics and weapons sites across eastern Iraq, a response to over 30 aerial drone attacks directed by the Islamic Revolutionary Guard Corps (IRGC) in the last 72 hours.

The September Brent oil futures jumped 3.84% to $85.23, while the September WTI crude oil futures rose 4.25% to $82.63. The August and September crude oil futures on MCX also gained 4.45% and 3.99%, respectively.

Warren Patterson, Head of Commodities Strategy at ING Think, said that prices popped higher in early morning trading after a heavy sell-off over the last three days. The US intercepted a surprise attack on its troops, while Saudi Arabia also intercepted drones targeting their energy infrastructure.

The incident throws cold water on the idea of a swift de-escalation in the Persian Gulf, according to Patterson and Ewa Manthey, Commodities Strategist at ING Think. They warned that Saudi oil infrastructure is increasingly targeted, posing a risk of more prolonged supply disruptions.