- WTI price rises over 2% amid increased supply concerns following the US strikes on three Iranian nuclear facilities.
- President Trump said that he had “obliterated” Iran’s main nuclear sites, including Fordow, Natanz, and Isfahan.
- Oil prices could climb further due to potential supply threats, with Iran threatening to close the Strait of Hormuz.
West Texas Intermediate (WTI) Oil price trades around $75.50 per barrel during the Asian hours on Monday after pulling back from a five-month high of $76.74. WTI price opened higher by over 2% due to increased fears over supply concerns after the United States (US) launched strikes on three Iranian nuclear facilities over the weekend.
US President Donald Trump announced late Saturday that he had “obliterated” Iran’s main nuclear sites, including Fordow, Natanz, and Isfahan, in strikes overnight, in coordination with an Israeli assault. This Middle East conflict is poised to escalate as Tehran has vowed to defend itself.
Traders expect further gains in Oil prices amid rising fears that an Iranian retaliation may shut down the Strait of Hormuz, through which roughly 20% of global crude supply flows. Iranian parliament approved a measure to close the strait. Iran has threatened to close the strait in the past but has never followed through on the move, according to Iran’s Press TV via Reuters.
Reuters cited June Goh, senior analyst at Sparta Commodities, saying, “The risks of damage to Oil infrastructure have multiplied.” Although there are alternative pipeline routes out of the region, there will still be crude volumes that cannot be fully exported if the Strait of Hormuz becomes inaccessible. Shipping traffic will likely decline in the area, Goh added.
