Oil prices soared Wednesday after President Donald Trump said he would attack Iran harshly in retaliation for an attempted surprise attack on U.S. forces in the Middle East.
brent crude oil Futures, an international benchmark, rose 7.8% to $90.63 per barrel. us West Texas Intermediate Futures also rose 6.8% to $84.69.
President Trump told Fox News that Iran “will be hit” after the Revolutionary Guards fired a ballistic missile at U.S. troops. “We’re going to hit them hard,” the president said.
According to a report by Axios, Iran targeted a US military base in Jordan. US Central Command announced that it had successfully intercepted the missile.
This attack broke a brief lull in fighting. Oil futures sold off earlier this week as the conflict appeared to be on its way to calming down.
“We remain very skeptical that we are on the brink of a major diplomatic breakthrough that would resolve the nuclear standoff that started war five months ago or allow maritime traffic to normalize,” Helima Croft, head of product strategy at RBC Capital Markets, said in a note to clients on Tuesday.
Meanwhile, Iranian-allied militias in Iraq launched drones at oil facilities in Saudi Arabia’s Riyadh and eastern regions, according to the state-run Saudi Press Agency. U.S. Central Command said Tuesday that U.S. and Saudi warplanes launched a joint strike against Iraqi militias in retaliation.
Iran’s Houthi alliance in Yemen announced on Monday that it had targeted Saudi pipeline infrastructure that transports oil to the Red Sea export terminal Yanbu. Riyadh relies on pipelines to export oil because Iranian attacks have disrupted shipping through the Strait of Hormuz.
Iran and the Houthis are seeking to restrict shipping traffic through Hormuz and the southern Red Sea, a bottleneck for Middle East oil exports.
Iran has repeatedly attacked oil tankers sailing through Hormuz this month. The Houthis last week declared a maritime embargo on Saudi Arabia and claimed to have attacked two tankers in the Red Sea.
“Markets have jumped on hopes of renewed peace, especially given Iran’s claims to control the strait under a potential deal,” Ryan McKay, senior commodity strategist at TD Securities, said in a note Wednesday.
“We continue to see lower oil spills and tightening global energy markets supporting further oil price gains,” McKay said.
Correction: This article has been updated to correct the futures delivery month.
