Oil: Prices Strengthen Following New Naval Blockade in the Persian Gulf
The Chief Energy Analyst at Mst Marquee, Saul Kavonic, Warned That the Oil Price Could Retest 100 Dollars per Barrel.
Oil prices moved upward again today, Wednesday, in a highly volatile session, as the United States launched a new wave of attacks against military targets in Iran and reinstated the naval blockade of Iranian ports near the Strait of Hormuz.
US West Texas Intermediate (WTI) crude for August delivery strengthened by 0.24% to 79.53 dollars a barrel, while the international benchmark Brent recorded a 0.48% increase to 85.14 dollars a barrel.
Earlier in the session, contracts had moved even higher, with WTI reaching up to 79.85 dollars (+0.64%) and Brent to 85.53 dollars (+0.95%).
The US Central Command (CENTCOM) announced that it carried out a new wave of attacks against Iran late Tuesday night (US time), striking dozens of military targets near the Strait of Hormuz and along the Iranian coastline as part of a seven-hour operation.
According to the statement, the operation involved fighter jets, unmanned aerial vehicles, and warships, targeting missile and drone installations, naval infrastructure, and coastal defense systems to further limit Tehran's ability to threaten international commercial shipping.
The operation began just a few hours after the reinstatement of the US naval blockade for ships heading to or departing from Iranian ports.
In a subsequent post on social media, CENTCOM commander General Brad Cooper accused Iran of "deliberately" targeting civilians and attacking seven commercial vessels over the past week, resulting in approximately a dozen crew members being killed, missing, or injured.
The chief energy analyst at MST Marquee, Saul Kavonic, estimated that the latest escalation proves that expectations for a rapid reopening of the Strait of Hormuz were premature.
As he stated, the resumption of hostilities and the enforcement of a new naval blockade put the conflict back on a path of further escalation.
He warned that the price of oil could retest 100 dollars per barrel if the current intensity of military operations is maintained for several weeks, while he did not rule out even higher prices in the event that energy infrastructure in the wider Middle East region is targeted.
