Calm in the oil markets proved short-lived as prices jumped nearly 3% in early Wednesday trade. The spike came after the United States launched military strikes against Iran in response to attacks on commercial vessels in the Strait of Hormuz, stoking fears that the fragile truce was beginning to unravel and threatening one of the world’s most critical oil transit routes.Around 7:15 am IST, Brent crude was trading at $75.54 a barrel, up 1.86%, while WTI crude was at $71.81 a barrel, up 1.94%, after earlier surging as much as 3%.According to US central command, the strikes on Iran followed Iranian attacks on three commercial vessels transiting the Strait of Hormuz on Tuesday.The attacks also prompted the US treasury department to revoke its authorisation for Iranian oil sales earlier this week. The department had previously waived sanctions on Iranian oil through August 21 after Washington and Tehran reached an interim agreement last month to reopen the Strait of Hormuz. The waiver had allowed imports of Iranian crude into the US and payments to Tehran in US dollars, among other provisions.Meanwhile, Iran’s latest attacks targeted three commercial vessels. According to the joint maritime information center, a US-led naval group that provides security updates to merchant ships operating in the Middle East, a liquefied natural gas tanker, an oil supertanker and a third, unspecified tanker came under attack in or near the Strait of Hormuz.Qatar blamed Iran for striking the vessels, including the Qatari liquefied natural gas tanker Al Rekayyat. The vessel was reportedly hit by a drone, triggering a fire in its engine room, though the crew remained safe and were being evacuated.Separately, maritime security sources cited by Reuters said that a Saudi-flagged crude oil tanker, believed to be the supertanker Wedyan, was damaged off the coast of Oman. Following the attacks, the joint maritime information center warned mariners that the threat level for ships crossing the Strait of Hormuz had risen to “severe”, saying hostile action by Iran was likely.The latest developments have reignited fears that tanker traffic through the Strait of Hormuz could face further disruptions.Although Iran had pledged to ensure safe passage for ships through the Strait under its interim agreement with the United States, Tehran later insisted that vessels should use a northern route under its control. It has since attacked ships using the US Navy-protected route along Oman’s coast.“This is part of this sporadic targeted campaign by Iran to destabilize that southern corridor and send a message to Gulf state producers that are not sending their oil via that northern corridor,” said Michelle Wiese Bockmann, senior maritime intelligence analyst at Windward.Ships are now avoiding the traditional route through the middle of the Strait of Hormuz because Iran mined it.
