The prices of the two most relevant oil benchmark futures shot up after reports indicated that a U.S. warship was recently struck by the IRGC, reigniting the hostilities in the Strait of Hormuz. Nonetheless, U.S. officials have denied these reports.
Key Takeaways:
CENTCOM denied reports of 2 IRGC missiles striking a U.S. ship during Trump’s Project Freedom. Fearing disruptions to 20% of global crude, WTI futures spiked to $107.28 before cooling. Following the April 7 truce, Iran’s Aliabadi warned that entering U.S. forces will be attacked. Oil Shoots Up As Reports Of Strikes In Strait of Hormuz SurfaceOil prices continue to be swayed by reports from the Strait of Hormuz, a key passageway for over 20% of the world’s crude, which ongoing geopolitical conflicts have disrupted.
The price of the West Texas Intermediate (WTI) and Brent futures, two of the most used benchmarks in the oil industry, have risen after early Monday reports that a U.S. warship was struck by two missiles from the Islamic Revolutionary Guards Corps (IRGC), a development that would mark a restart of the hostilities since a ceasefire was reached on April 7.
WTI Crude futures with delivery in June climbed up to $107.28 on early morning, and then stabilized to a little over $105. Similar futures for the Brent benchmark but with July delivery rose close to $114 and later dropped near the $110 mark per barrel.
The reports come after President Trump announced that the U.S. Navy would be conducting an operation to “free the ships” of countries all over the world stuck in the Strait of Hormuz.
Nonetheless, Project Freedom has not been well received by the Iranian regime, which has rejected the passage of any U.S. ships through the Strait. “We warn that any foreign armed force — especially the aggressive US military — will be attacked if they intend to approach and enter the Strait of Hormuz,” said Iran’s military chief Ali Abdollahi Aliabadi, stressing that any safe passage must be coordinated with Iran’s armed forces.
