Oil Surges as Iranian Attacks End War Lull
Oil prices surged during Wednesday's trading (July 29) following a resumption of airstrikes in the Middle East. Brent crude closed up 7.91% at US$90.74 per barrel, while WTI rose 6.56% to US$84.46 per barrel.
The rally was triggered by US and Saudi Arabian strikes against an Iran-backed group in Iraq. These strikes followed accusations that the group had launched drones at Saudi oil facilities.
Tensions escalated further after Iran claimed responsibility for attacks on a vessel in the Strait of Hormuz and a US military base in Jordan. Explosions also struck a gas terminal in Egypt, while a US-owned storage vessel was reportedly hit by a drone attack.
US President Donald Trump subsequently vowed further strikes against Iran. Washington also imposed new sanctions on various entities and tankers accused of helping Iran profit from activities in the Strait of Hormuz.
Supply risks have intensified as vessel traffic through the Strait of Hormuz remains severely restricted. US crude inventories fell by 7.2 million barrels to 404.5 million barrels—the lowest level since 2018 and a drop far exceeding market forecasts.
Consequently, oil prices are likely to remain volatile, fluctuating between US$80 and US$100 per barrel for the duration of the conflict. Declining US stocks and the possibility of OPEC+ halting production increases starting in October could bolster prices, though this also raises the risk of inflation and global interest rate pressures. (arl)
Source: Newsmaker.id
