Oil Prices Today, July 8: Crude oil prices climbed more than 2 per cent on Wednesday, July 8, as renewed escalation between the United States and Iran raised concerns over potential disruptions to global oil supplies. The latest surge in oil prices came after Washington launched military strikes in response to Iranian attacks on commercial vessels in the strategically important Strait of Hormuz.
As of 7:35 AM IST, both major crude oil benchmarks were trading higher. Brent crude oil futures gained 2.4 per cent or USD 1.80 to trade at USD 75.96 per barrel, while West Texas Intermediate (WTI) crude futures rose 2.6 per cent to USD 75.96 per barrel.
The jump in crude prices followed a sharp decline in the previous session, when oil prices traded below the USD 70 mark. However, both Brent and WTI recovered nearly 3 per cent on Tuesday as investors reacted to rising geopolitical risks in the Middle East.
US-Iran conflict fuels crude oil price rally
The latest increase in crude oil prices was driven by renewed tensions between Washington and Tehran. The United States carried out a series of military strikes against Iran after Iranian forces reportedly attacked three commercial vessels passing through the Strait of Hormuz.
The Middle East plays a crucial role in global oil production, and any instability in the region often leads to concerns about supply shortages. The Strait of Hormuz, through which a significant portion of global oil exports passes, remains a key focus for energy markets.
Strong US dollar limits gains in oil prices
Despite geopolitical concerns supporting crude prices, gains were limited by a stronger US Dollar. The dollar index, which measures the US currency against a basket of six major currencies, rose 0.1 per cent to 101.16.
A stronger dollar generally puts pressure on crude oil prices because oil is traded in US currency. When the dollar strengthens, crude becomes more expensive for buyers using other currencies, potentially reducing demand.
Saudi oil tanker damaged near Oman
Adding to market concerns, maritime security sources reported that a Saudi-flagged crude oil tanker, believed to be the supertanker Wedyan, was damaged off the coast of Oman, Reuters reported.
The incident has further increased market uncertainty over the safety of oil transportation routes in the region.
US reimposes sanctions on Iranian oil
The United States also announced the reimposition of sanctions on Iranian oil exports on Tuesday. A US official stated that Iran’s attacks on vessels in the Strait of Hormuz were “wholly unacceptable” and warned that further actions would face consequences.
The renewed sanctions could add additional pressure on Iran’s oil exports and potentially influence global crude supply levels.
Impact on gold and silver prices
The rising US-Iran tensions also affected other commodities, including gold and silver. Gold prices remained mostly flat on Wednesday, July 8, after slipping earlier in the session due to a stronger US Dollar.
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
