Oil prices rose sharply on Tuesday, with Brent crude surpassing $87 per barrel for the first time since June, following renewed U.S. military strikes on Iran and the impending reimposition of a blockade on Iranian ports. U.S. crude oil also increased, climbing over 4% from the previous session to more than $81 per barrel. Since the start of trading on Sunday night, Brent has surged more than 15%, while U.S. crude has risen over 12%, according to data from NBC News.
Military Actions and Blockade
The price increase coincides with U.S. Central Command's announcement that it conducted strikes on multiple military targets in Iran, including Bushehr and Bandar Abbas, aimed at degrading Iran's capacity to threaten commercial shipping. The U.S. military stated that the blockade on Iranian ports and vessels in the Strait of Hormuz would take effect at 4:00 p.m. ET on Wednesday, which analysts believe will have a significant impact on market dynamics. ING commodities analysts noted,
The return of the U.S. blockade is much more impactful for markets than the previous suspension of the sanction waiver on Iranian oil.
Shipping Traffic Declines
In light of the renewed military actions, commercial shipping traffic through the Strait of Hormuz has diminished. Data from Kpler indicated that the number of vessels transiting the strait fell from 24 on Saturday to just 10 by Monday. Analysts from ING remarked that while the U.S. claims the Strait of Hormuz remains open, the ongoing conflict has raised concerns about secure passage for vessels in the region.
Related coverage: US Resumes Strikes on Iran Amid Rising Geopolitical Tensions.
The renewed U.S. blockade and military actions are likely to drive oil prices higher, impacting energy sector stocks and commodities. Investors should monitor fluctuations in oil prices, which could affect inflation rates and consumer spending. Watch for further developments from the U.S. military regarding operations in the region and any potential diplomatic responses from Iran.