Global oil prices continued the surge on June 11 after Iran closed the Strait of Hormuz amid new US military operations against Iranian facilities. This raised concerns about oil supplies from the strategic transit corridor and sent oil prices up to their previous levels.
Brent crude futures gained $1.58, or 1.70%, at $94.68 per barrel by 4:10 GMT. West Texas Intermediate crude futures surged $1.78, or 1.98%, to $91.81 per barrel. Earlier, WTI had gained by more than $3.
This recent wave came after rising tension between Washington and Tehran. In his address on Wednesday, US President Donald Trump declared that military operations could continue if diplomatic efforts to reach a peace agreement were unsuccessful. Shortly afterward, another military offensive was conducted by US forces against Iran.
On its part, Iran’s army has ordered the closure of the Strait of Hormuz, barring all navigation traffic, which includes oil carriers and commercial shipping. Ships crossing through the strait would be viewed as hostile forces.
The Strait of Hormuz is one of the main routes for transporting crude oil around the world. Any obstruction to passage through the strait will cause alarm in the global energy sector. The recent attack was in retaliation for an Army Apache helicopter shot down by Iran last week.
Supply concerns received further support from the latest US inventory data. Figures released by the Energy Information Administration showed crude stockpiles fell by 7.2 million barrels in the week ended June 5. Analysts had expected a decline of around 3 million barrels.
Total US crude inventories now stand at 426.5 million barrels. The drawdown adds to a broader trend that has been seen since the conflict with Iran intensified on February 28. According to available data, US crude inventories, including strategic reserves, have fallen by 79 million barrels during that period. The decline reflects efforts to offset disruptions caused by restrictions on movement through the Strait of Hormuz.
In addition, the increase in oil prices is drawing the attention of those tracking inflation trends. There will be greater pressure on consumer prices since inflation is already rising amid higher energy prices. Consumer price inflation in the United States rose to 4.2% in May, reinforcing expectations that interest rates will remain high.
The oil markets are now paying closer attention to developments in the Gulf, since the fate of global oil supply largely depends on the current geopolitical and military events.
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