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- October 19, 202614°
- BIST10011,722-2.89%
- USD49.45+0.05%
- EUR55.62+0.37%
- GOLD4,195.10+0.33%
- INTEREST37.00%-1.00
- BITCOIN81,526+0.18%
- October 19, 202614°
US-Iran mutual attacks trigger rise in oil prices
Mutual attacks between the US and Iran over the weekend diminished hopes for a return to normal navigation in the Strait of Hormuz, pushing oil prices higher. Brent crude rose 0.9 percent to $73.21.
War premium returns to oil prices
Oil prices in international markets have risen again amid escalating tensions between the US and Iran over the weekend. The price of Brent crude increased by around 0.9 percent as mutual attacks by Iran and the US weakened expectations for a return to normal ship traffic in the Strait of Hormuz.
Brent crude futures for August delivery traded at $73.21 per barrel as of 03:30 GMT on the first trading day of the week. This was 127 cents above the level seen on the day before the US and Israel launched a war against Iran on February 28.
Analyst calls it a 'reality check'
Fabien Yip, a market analyst at IG in Sydney, Australia, said the partial recovery in Brent crude reflected a market that had been overly optimistic about a ceasefire. Yip noted that oil had almost completely priced out the war premium despite a memorandum of understanding with no implementation details and ongoing attacks.
The analyst stated that the attack on a commercial ship on Thursday served as a reality check, and the mutual strikes over the weekend further reinforced this situation.
Mutual attacks and ceasefire talks
The US Central Command announced that it carried out strikes on Iran on Friday and Saturday, citing Iran's attacks on two commercial ships in the Strait of Hormuz, through which about a fifth of the global oil and liquefied natural gas trade passes in peacetime. Iran responded to these strikes by launching a series of missiles and drones at US military assets in Bahrain and Kuwait.
Late on Sunday, multiple media outlets, citing unnamed US officials, reported that Washington and Tehran had agreed to halt their attacks and restart negotiations to end the war. The Axios news site, citing an unnamed senior US official, also reported that the parties would hold talks in Doha, the capital of Qatar, on Tuesday. There has been no comment yet from Iran regarding the reported ceasefire and planned talks.
US President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding on June 17 to end the war. However, the agreement has come under repeated strain due to renewed clashes and disagreements over the meaning of the text.
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