- Global crude oil prices rose up to 3% after renewed US-Iran hostilities on May 8
- US military struck Iranian sites in retaliation for attacks on US forces in the Strait of Hormuz
- Iran accused the US of violating the ceasefire by targeting ships and civilian areas
Global crude oil benchamrks rose as much as 3% in early trading on Friday, May 8, after renewed hostilities broke out between the US and Iran. The US military said it carried out retaliatory strikes on Iran, targeting sites responsible for attacking US forces. Iran's military accused the US of violating the ceasefire between the two countries, saying the US had targeted two ships in the Strait of Hormuz and attacked civilian areas. Meanwhile, Trump threatens more strikes on Tehran if deal not signed 'fast'.
Brent crude futures gained 3% to hit $102.7 per barrel in early trade while the US West Texas Intermediate oil prices were trading up 2.58% or $2.45, at $97.26 a barrel, after initially gaining more than 3%. The WTI contract had settled down 27 cents at $94.81 per barrel in the previous trading session. The crude benchmarks have traded amid heightened volatility this week after hitting a two-week low mark on Wednesday on optimism over a possible end to the Middle East war. However, they pared losses in afternoon trade on Thursday, after Trump said it was "too soon" for face-to-face talks with Tehran.
US-Iran hostilities weighs on crude
The US military said it intercepted Iranian attacks targeting three Navy ships in the Strait of Hormuz and carried out retaliatory self-defense strikes amid rising tensions and a fragile ceasefire. The escalation comes just 48 hours after Trump briefly paused 'Project Freedom' in the Strait of Hormuz - an operation launched to escort ships from multiple countries safely through the restricted waterway - citing significant progress toward a final agreement with Iran. Later, speaking to media, Trump said that Iran was trifled with them today.
In a post on X, the US Central Command said that the Iranian forces launched multiple missiles, drones and small boats as USS Truxtun (DDG 103), USS Rafael Peralta (DDG 115), and USS Mason (DDG 87) transited the international sea passage. "US.Central Command (CENTCOM) eliminated inbound threats and targeted Iranian military facilities responsible for attacking U.S. forces including missile and drone launch sites; command and control locations; and intelligence, surveillance and reconnaissance nodes." It fadded that CENTCOM does not seek escalation but remains positioned and ready to protect American forces.
ALSO READ: Oil Bets Under Scanner: US Watchdog To Probe $2.6-Billion Trades Linked To Iran War
Oil price bets total $7 billion
Reuters reported that a series of well-timed market bets on falling oil prices totalling as much as $7 billion during March and April spread across multiple exchanges and types of fuel and derivatives just before major Iranian policy announcements by US President Donald Trump, according to traders, market experts and the agency's analysis of exchange data.
The size exceeds previously reported bets amounting to $2.6 billion, which have already prompted the US administration to warn staff against using nonpublic information for financial benefit. The US Commodity Futures Trading Commission (CFTC) is investigating, a person familiar with the matter told Reuters in April, although the CFTC has yet to officially confirm a probe is underway.
The bets included short positions, or bets that prices would fall, for derivatives including ICE, CME crude, diesel and gasoline futures. It took place on two major exchanges that host benchmark global oil and fuel futures trade: the Intercontinental Exchange (ICE) and Chicago Mercantile Exchange (CME). The CME is investigating the trades, as per Reuters. The trades have been reported on the most actively traded front-month contracts for the two global crude benchmarks, Brent and US WTI. The value of the bets in March and April stood at around $2.6 billion, according to Reuters calculations.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
