The truce between the United States and Iran, which increased oil supply in recent weeks and caused fuel prices to fall to levels prior to the start of the conflict, on February 28, was short-lived. On Wednesday (8/7), after surpassing US$80, a barrel of Brent (international reference) closed the day at US$78.02, an increase of 5.2%. A barrel of WTI (US reference) rose 4.4%, closing at US$73.52.
Oil soars with new exchange of attacks between US and Iran
The truce between the United States and Iran, which increased oil supply in recent weeks and caused fuel prices to fall to levels prior to the start of the conflict, on February 28, was short-lived. On Wednesday (8/7),...
Trump said the fragile ceasefire between the countries may have come to an end, Bloomberg reports. “For me, I think it’s over,” said “Agent Orange”, sitting next to North Atlantic Treaty Organization (NATO) Secretary-General Mark Rutte at the military alliance’s annual summit yesterday. “As far as I’m concerned, it’s just a waste of time.”
Before the declaration, Trump promised new attacks on Iran. And he delivered. Explosions were recorded in the cities of Bushehr, Bandar Abbas and Sirik, on the country's coast, according to the Iranian press. Iran said it would react to any attack on its territory by closing the Strait of Hormuz again.
In a statement, the US Central Command (CENTCOM) reported that, “under the guidance of the commander in chief”, US forces began carrying out new bombings to “further reduce Iran's ability to threaten freedom of navigation in the Strait of Hormuz”, reports g1.
This week, Iran struck three oil tankers that crossed the strait. On Tuesday night (7/7), the USA responded with the harshest bombardment since negotiations between the two countries began, according to Folha.
Before joint US and Israeli attacks on Iranian territory at the end of February, a fifth of global oil supplies passed through Hormuz. Since then, Iran has maintained strict control over the movement of ships along the route, forcing other oil producers in the Middle East to reduce production by millions of barrels due to the impossibility of exporting at the same rate as before, explains Reuters.
With tensions returning, the question now is knowing how high the price of oil can increase, recalls InfoMoney. At the height of the conflict, a barrel of Brent reached close to US$120, followed closely by WTI.
For Edgar Araújo, CEO of Azumi Investimentos, Brent could seek the US$80 to US$90 range if tension in the Middle East threatens global supply or flow through Hormuz. Gustavo Assis, CEO of Asset, also sees room for further increases, but states that the market needs to separate the geopolitical premium from a physical supply shock.
Source: ClimaInfo
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