Oil Market Calm Is Shattered by Fresh Hostilities
The latest cracks in the cease-fire between the United States and Iran have jolted an oil market that in recent weeks seemed to think durable peace between the countries was within reach.
By midday Wednesday, international oil prices were approaching $80 a barrel, their highest level in weeks, after President Trump said the temporary truce with Iran was “over.”
Oil is trading at prices that have been fairly typical in recent years. But the international benchmark, Brent, has risen sharply from the start of the week when it was below prewar levels and analysts were warning that the world might soon face a glut.
“The honeymoon phase is over,” said Dan Pickering, chief investment officer for Pickering Energy Partners, a financial services firm based in Houston. “We’re being reminded that this is still an active conflict.”
The latest flare-up was set off by Iran’s efforts to exert more control over the Strait of Hormuz by striking vessels that were not following the country’s preferred route through the waterway. The United States responded by attacking Iran and revoking the sanctions relief it had provided for the country’s oil industry.
Iran then targeted U.S. military sites in Bahrain and Kuwait, and its foreign ministry said recent U.S. actions had rendered ineffective “important and essential parts” of the deal between the countries.
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