Oil prices rose on Thursday after a new U.S. attack on Iran reignited concerns about disrupting commercial shipping through the Strait of Hormuz.
brent By 7:48 a.m. ET, international benchmark crude oil futures prices were up about 3% to $97.16 a barrel. West Texas Intermediate futures also rose about 3% to $91.43 a barrel.
Iran’s Revolutionary Guards said Thursday it targeted a U.S. air base at around 4:50 a.m. local time, the Islamic Republic’s semi-official Tasnim news agency said. The Revolutionary Guards did not reveal the location of the air base.
The announcement came after the US military launched a new offensive against military positions in Iran believed to threaten US troops and commercial shipping passing through the Strait of Hormuz, US officials told MS NOW. It also reportedly intercepted and shot down several Iranian drones.
Citi said in a note late Wednesday that the oil market is on firmer footing as investors increasingly price in worst-case supply disruption scenarios on signs that the U.S. and Iranian governments are nearing a deal.
Still, the central bank warned that policymakers are considering tightening monetary settings in response to energy-driven inflation risks and that uncertainty around the timing of the deal is making central banks wary.
Citi said the prolonged rise in oil prices is beginning to feed into broader inflationary pressures, particularly through a “second round effect”, with some central banks becoming more hawkish.
