Oil prices rose sharply on Tuesday following reports of attacks on multiple tankers in the Strait of Hormuz. U.S. crude oil increased by more than 3% to over $70 per barrel, while international Brent crude also gained 3%, surpassing $74 per barrel. The U.K.'s Maritime Trade Operations center confirmed two vessels were struck by projectiles, one reportedly hit by an uncrewed aerial vehicle and another believed to have sustained structural damage. A U.S. official stated that Iran's Islamic Revolutionary Guard Corps was responsible for the missile strikes on the ships, with additional drones shot down by the U.S. military.
Key Details
The situation escalated when a third tanker off the coast of Oman caught fire. Reports indicated that this vessel, identified as the Al Rekayyat, a liquefied natural gas tanker, was at risk of exploding due to engine room fires. These developments have raised safety concerns among oil traders, contributing to the price surge.
Background
In response to the news, U.S. Treasury yields also increased, with the 20- and 30-year yields rising above 5%. The 10-year government bond yield, which influences consumer borrowing rates, reached its highest level since early June. The S&P 500 index initially fell nearly 1% but later recovered to a 0.3% decline. The Nasdaq 100 index experienced a more significant drop, falling as much as 2%, largely due to declines in technology stocks, including a 7% plunge in Samsung shares.
Related coverage: Tanker Struck by Missile in Strait of Hormuz Amid Tensions.
The rise in oil prices is likely to affect energy sector stocks and commodities, as heightened tensions in the Strait of Hormuz could lead to supply disruptions. Investors will watch for further developments in the region, particularly any additional military actions or diplomatic responses from the U.S. and Iran.