Oil prices rose on Wednesday after Prime Minister Benjamin Netanyahu told CNBC that Israel and the United States are ready to attack Iran again if necessary.
West Texas Intermediate futures rose nearly 2% to $95.43. Brent crude, the international benchmark, rose more than 1% to $97.54 per barrel.
Prime Minister Benjamin Netanyahu said in an exclusive interview with CNBC’s Sarah Eisen that President Donald Trump has warned Iran that “there will be a full return to military action” if necessary.
“That’s the president’s decision,” Netanyahu said. “Israel is ready, the U.S. military is ready. I think Iran should consider that. I think they do, but they are playing with fire.”
When asked about Israel’s military offensive in Lebanon, the prime minister said: “We need to disarm Hezbollah and demilitarize Lebanon.” President Trump also shares this goal, the prime minister said.
Prime Minister Benjamin Netanyahu played down speculation that his actions in Lebanon have strained his relationship with President Trump. The prime minister said that although the United States and Israel have differences on tactical issues, they are generally in agreement.
Iran has refused to agree to a deal with the United States to reopen the Strait of Hormuz, critical to global oil supplies, until Israel ceases attacks on Lebanon and withdraws from the country.
Meanwhile, the United States and Iran once again exchanged military attacks, demonstrating the fragility of the ceasefire between the two countries. US Central Command said on Tuesday that it had launched a defensive offensive, destroying multiple Iranian ballistic missiles and drones following an “attempted attack” by Iran.
Following this, President Trump and Secretary of State Marco Rubio said the United States was still in talks with Iran over a potential deal to end the conflict, pushing back against reports in Iranian media that suggested communications had been disrupted.
Brent crude oil price this year
Rubio also told the Senate Foreign Relations Committee that as part of those discussions, Iran “could potentially negotiate aspects of its nuclear program.”
This was in contrast to a report in Iran’s Fars news agency on Tuesday that said Iran and Washington had not exchanged messages for several days. State media Tasnim reported on Monday that Iranian negotiators had halted indirect communications with the United States and that the Iranian government was seeking a complete shutdown of Hormuz.
“Fake news reports that the Islamic Republic of Iran and the United States stopped speaking days ago are false and false,” President Trump said in a post on Truth Social Tuesday afternoon.
With Iran essentially in control of the sea lanes, oil exports through Hormuz remain well below pre-war levels. While fuel demand is expected to recover this summer, global inventories are rapidly decreasing due to the Hormuz blockade. As a result, oil prices will rise, industry executives and analysts say.
Even in the most optimistic scenario, in which Hormuz fully reopens, the oil market will lose an additional 1 billion barrels of crude oil production and 800 million barrels of inventory between June and November, according to TD Securities.
“The damage has already been done and oil markets will continue to tighten even under a comprehensive agreement scenario,” Ryan McKay, senior commodity strategist at TD Securities, told clients in a note Monday.
