Oil Jumps Over $2 as Iran Shuts Strait of Hormuz After US Military Strikes
Market Impact and Geopolitical Developments
Oil Price Surge Following Strait Closure
June 11 (Reuters) - Oil prices climbed more than $2 a barrel Thursday as Iran declared the critical energy chokepoint, the Strait of Hormuz, closed after the U.S. launched additional strikes against Iran.
Brent futures rose $2.30, or 2.47%, to $95.40 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed $2.60, or 2.89%, to $92.63. U.S. crude futures gained more than $3 earlier in the session.
Strait of Hormuz Closure and Military Tensions
Iran's Announcement and Threats
Iran's top joint military command announced the closure of the Strait of Hormuz on Thursday, including oil tankers and commercial ships, saying any vessel that will attempt passage will be shot at.
US Military Response
However, the U.S. military said on X on Wednesday that commercial ships continue to transit in and out of the strait.
It also said no U.S. warships have been struck in the strait, after Iran's state media reported U.S. ships near the waterway were targeted by missiles and drones.
Escalation of Strikes
U.S. forces began launching additional strikes against multiple targets in Iran at 5:15 p.m. EDT (21:15 GMT), the latest in an escalating exchange of attacks that threaten to reignite a full-scale war, which was paused in early April when the two sides agreed to a fragile ceasefire.
Oil Supply and Inventory Effects
Global Oil Shipments Disrupted
Iran's months-long blockade of the strait, which normally carries a fifth of the global oil and gas shipments, have kept oil prices elevated.
US Crude Inventory Changes
Weekly Drawdown
Meanwhile, U.S. crude inventories fell by 7.2 million barrels to 426.5 million barrels in the week ended June 5, the EIA said on Wednesday, compared with analysts' expectations in a Reuters poll for a 4 million-barrel draw. [EIA/S]
Strategic Reserves and Supply Gaps
U.S. crude inventories, including those from strategic reserves, have fallen by 79 million barrels since the Iran war began on February 28, as the world's largest producer stepped into fill supply gaps left by the effective closure of the strait.
(Reporting by Georgina McCartneyEditing by Shri Navaratnam)