- Oil prices climbed after a tanker was struck off Saudi Arabia and Trump escalated Iran threats, with WTI gaining 2% to $95.99 and Brent up 1.7% to $88.27.
- Secretary of State Marco Rubio said Iran was not being serious about reaching an agreement, but the U.S. remained committed to diplomacy.
- HSBC noted that the oil rally reflects renewed concerns over the Strait of Hormuz after the ceasefire breakdown, with analyst Kim Fustier highlighting the unresolved issue of passage administration.
Oil prices rose significantly on Thursday, with WTI futures climbing 2% to $95.99 per barrel and Brent futures increasing 1.7% to $88.27 per barrel, following an attack on a tanker off Saudi Arabia's coast.12
This incident occurred shortly after President Trump issued a stark warning, stating, "From this point forward, any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT."
The escalation in rhetoric comes amid rising tensions after the collapse of the U.S.-Iran ceasefire, with Iran threatening to retaliate against U.S.-linked infrastructure if attacked. An unnamed Iranian military source warned, "If the Americans target a bridge or a power plant in Iran, Iran will, in turn, strike infrastructure and bridges in the region, including energy facilities where the United States has interests."
The recent surge in oil prices reflects growing concerns over the security of shipping routes in the Strait of Hormuz, a critical passage for global oil supplies. HSBC noted that the outlook for oil prices now hinges on whether diplomatic efforts can restore stability in the region.45
Kim Fustier, a senior global oil and gas analyst at HSBC, remarked, "Since 7-8 July, the ceasefire has frayed as Iranian attacks on vessels transiting the strait of Hormuz prompted U.S. retaliatory strikes."
“WTI crude rose 2% to $95.99 and Brent gained 1.7% to $88.27 after the tanker strike, as HSBC analyst Kim Fustier said the ceasefire breakdown left the Strait of Hormuz passage unresolved. Secretary of State Marco Rubio said Iran was not 'serious' about a deal but the U.S. remained 'committed to diplomacy.'”
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