Update: WTI Oil Surges 9.2% as an Escalating US-Iran Conflict Threatens Strait of Hormuz
West Texas Intermediate (WTI) crude oil surged 9.2% Monday to the highest in a month after the conflict between the US and Iran escalated over the weekend, fueling concerns about potential disruptions to global crude supplies.WTI crude oil closed up $6.73 to settle at $78.14 per barrel, the highest since June 15, while September Brent crude was last seen up $7.39, or 9.7%, to $83.40.The US struck sites in Iran, while Tehran targeted shipping in the Strait of Hormuz and US assets in neighboring countries. Iran also renewed its threat to close the Strait, the chokepoint through which about 20% of global oil consumption moves before reaching international markets.The Guardian reported only 14 ships moved through the waterway on Sunday, citing data from Kpler, the lowest level in a month and down 52% for the week ended Sunday. However, the U.S. said the Strait remains open.The apparent end to last month's peace deal between the two counties is pushing oil higher, renewing worries over higher inflation and rising interest rates and preventing countries that rely on Gulf exports from restocking inventories depleted since the Feb. 28 start to the war."Oil prices jumped ... after the battle for control over the Strait of Hormuz escalated over the weekend. Fresh strikes by US and Iran renewed concerns about the safe passage of oil and other key commodities through the narrow waterway. The hostilities also risk derailing efforts to rebuild inventories, according to the IEA, while further reducing the prospects for a diplomatic resolution," Saxo Bank noted.
