Oil rises to $86 after US restores Iran blockade, threatens strikes on energy targets

On Tuesday, oil prices hit a four-week high, rising 2%, as attacks deepened a supply crisis in the Strait of Hormuz -- a strategic water channel that aided the transport of one-fifth of global energy supplies during the pre-war period. 

Oil prices jumped for a second consecutive session as US President Donald Trump restored a naval blockade on the Iranian ports on Wednesday over Tehran’s attacks on ships transiting the Strait of Hormuz,

After a rally on Tuesday, Brent rose further on early Wednesday trade by $1.46, or 1.72%, to $86.19 a barrel by 0029 GMT while WTI surged $1.11, ​or 1.4%, to $80.40 a barrel.

On Tuesday, oil prices hit a four-week high, rising 2%, as attacks deepened a supply crisis in the Strait of Hormuz — a strategic water channel that aided the transport of one-fifth of global energy supplies during the pre-war period.

On Wednesday, the ⁠US conducted a fresh wave of strikes that continued for 7 hours. According to the US Central Command, the operation was launched “to continue degrading Iranian capabilities used to attack commercial shipping in the ‌Strait of Hormuz.”

Trump has also threatened to strike energy targets. In an interview with Fox News, Trump said, “I’ll save the energy targets for last, but ultimately we’ll hit energy targets.”

According to Tim Waterer, chief market analyst at KCM Trade, there are chances of oil retreating ​close to $100 soon if hostilities escalate, causing damage to energy infrastructure in the Gulf, Reuters reported. However, the reopening of the strait through diplomatic efforts can restrict the prices between $75 and$80 ‌a barrel. “For now, the risk premium is still embedded, but it’s not a one-way bet ​given that there remain incentives for both sides to find a diplomatic solution,” Reuters quoted Waterer as saying.

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Oil prices jumped for a second consecutive session as US President Donald Trump restored a naval blockade on the Iranian ports on Wednesday over Tehran’s attacks on ships transiting the Strait of Hormuz,

After a rally on Tuesday, Brent rose further on early Wednesday trade by $1.46, or 1.72%, to $86.19 a barrel by 0029 GMT while WTI surged $1.11, ​or 1.4%, to $80.40 a barrel.

On Tuesday, oil prices hit a four-week high, rising 2%, as attacks deepened a supply crisis in the Strait of Hormuz — a strategic water channel that aided the transport of one-fifth of global energy supplies during the pre-war period.

On Wednesday, the ⁠US conducted a fresh wave of strikes that continued for 7 hours. According to the US Central Command, the operation was launched “to continue degrading Iranian capabilities used to attack commercial shipping in the ‌Strait of Hormuz.”

Trump has also threatened to strike energy targets. In an interview with Fox News, Trump said, “I’ll save the energy targets for last, but ultimately we’ll hit energy targets.”

According to Tim Waterer, chief market analyst at KCM Trade, there are chances of oil retreating ​close to $100 soon if hostilities escalate, causing damage to energy infrastructure in the Gulf, Reuters reported. However, the reopening of the strait through diplomatic efforts can restrict the prices between $75 and$80 ‌a barrel. “For now, the risk premium is still embedded, but it’s not a one-way bet ​given that there remain incentives for both sides to find a diplomatic solution,” Reuters quoted Waterer as saying.