Oil Prices Rise Following New US Strikes on Iran

SadaNews - Oil prices have rebounded after the United States launched new strikes on Iran following the downing of an American helicopter, posing a new threat to the fragile truce that has been tested by recent attacks in the Middle East.

Brent crude rose by up to 2%, nearing $91 a barrel, while West Texas Intermediate crude jumped to $90 before retreating from its gains after the US announced the end of its short retaliatory campaign. In response, Iran launched a drone strike on the US Fifth Fleet in Bahrain, according to the official Iranian Radio and Television news agency.

The US Central Command stated on the platform "X" that the "defensive strikes" on Iran were executed under the direction of President Donald Trump in response to the downing of an Apache helicopter off the coast of Oman. The statement read: "The mission was a proportional response to Iran's unjustified aggression."

Qeshm Island in the Strait of Hormuz has reportedly experienced at least six explosions, along with strikes in the Jazak region near the narrow waterway, according to Iranian Radio and Television. Trump had earlier blamed Tehran for the attack on the helicopter, which he said was on patrol over the strait, vowing to respond.

Iranian Foreign Minister Abbas Aragchi said on Thursday, following the recent hostilities, that Iran will not leave any attack or threat unanswered. The military stated that it targeted "several US bases in the region" without providing details.

Stability of the Ceasefire

The new US strikes jeopardize the stability of the fragile ceasefire in the region and negotiations for a more sustainable agreement between the warring parties. Trump has repeatedly stated that peace talks are on the right track after earlier in the week exchanges of attacks between Israel and Iran broke out.

Sol Kavonik, chief energy analyst at MST Marquee, noted that the strikes "further highlight that any agreement with Iran remains distant," adding: "However, the market feels some relief that the strikes were proportionate, rather than a full-scale attack, indicating that the desire to favor reaching an agreement over war still exists."

The latest round of hostilities threatens to prolong the near-total closure of the vital Strait of Hormuz, which is under a dual blockade by the US and Iran. The war, which began in late February, has disrupted the supply of crude oil, fuel, and natural gas, raising concerns of a inflation crisis.

US crude oil inventories fell by 9.1 million barrels last week, according to a report by the American Petroleum Institute which was seen by Bloomberg, marking the largest drop since September if confirmed by government data later on Wednesday.

The country's stocks have already reached their lowest levels in four months, reflecting a decline in global supplies as buyers seek to offset the shortages in oil inventories in the Arabian Gulf.

Kavonik stated: "Every passing day intensifies competition in the market as global oil inventories drop to unprecedented low levels."