Oil: Prices supported by Iran conflict escalation – Danske Bank

FXStreet Insights Team FXStreet

Danske Research Team notes that Iran’s Revolutionary Guard has declared the Strait of Hormuz closed and reported attacks on vessels, while the US launched new strikes on Iranian targets. Brent crude has climbed toward USD 95/bbl on these developments.

Strait of Hormuz tensions lift Brent

"In the Iran-war, Iran's Revolutionary Guard declared the Strait of Hormuz closed and threatened to target any vessel attempting to transit, reporting that two ships were fired upon, although US Central Command said commercial traffic "was continuing to transit in and out of the Strait"."

"While the US launched new strikes on Iranian military assets inside Iran, Iran claimed drone and missile attacks on multiple US bases in Kuwait, Bahrain and Jordan."

"Trump grew tired of waiting for his 'deal' and has ordered new strikes against "multiple" targets in Iran overnight. In an interview following the strikes, Trump also added that the attacks would continue should a deal not be reached today. According to state-run TV in Iran, the Strait of Hormuz has been completely closed in response."

"Oil prices rose on the news, with Brent crude almost at USD 95/bbl."

"Despite this escalation, price action through the night has been relatively modest although Brent crude is moving higher."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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