Oil prices jump more than 7% after Trump says U.S. will hit Iran hard
Oil rose sharply amid renewed tensions in the Middle East after Iran launched an attack on U.S. forces using ballistic missiles.
BigThink
Crude oil prices rose sharply Wednesday, after President Donald Trump said the U.S. will hit Iran hard in retaliation for an attempted surprise attack on American forces in the Middle East.
Brent crude futures, the international benchmark, gained 7.4% to $90.35 a barrel. U.S. West Texas Intermediate futures also advanced about 7.4% to $85.11 per barrel.
Trump told Fox News that Iran "is going to get a beating" after the Islamic Revolutionary Guard Corps launched ballistic missiles at U.S. forces. "We'll be hitting them hard," the president said.
Iran targeted a U.S. base in Jordan, according to a report from Axios. U.S. Central Command said the missiles were successfully intercepted.
Iran-allied militias in Iraq, meanwhile, launched drones at oil facilities in Saudi Arabia's Riyadh and Eastern regions, according to the state-run Saudi Press Agency. U.S. and Saudi warplanes launched joint strikes Tuesday against the Iraqi militias in retaliation, U.S. Central Command said.
The attacks shattered a brief pause in fighting. Oil futures sold off earlier this week as the conflict seemed to be on a path toward de-escalation.
"We remain exceedingly skeptical that we are on the brink of a major diplomatic breakthrough that will resolve the nuclear standoff that started the war five months ago or enable the normalization of maritime traffic," said Helima Croft, head of commodity strategy at RBC Capital Markets, in a note to clients Tuesday.
Iran and its Houthi allies in Yemen are trying to control maritime traffic through the Strait of Hormuz and the southern Red Sea, the two crucial chokepoints for oil exports in the Middle East.
The Iranians have repeatedly attacked oil tankers transiting Hormuz this month. The Houthis declared a maritime embargo against Saudi Arabia last week and claimed attacks on two tankers in the Red Sea.
"We continue to maintain that the ongoing threat of missiles, mines, drones, and Tehran tolls will keep a significant portion of the shipping market on the sidelines," Croft wrote.
Correction: This story was updated to fix delivery month for futures.
