Oil prices climbed more than 2% during Asian trade on Wednesday after the United States launched fresh airstrikes against Iran and revoked a licence allowing Iranian crude sales, fuelling concerns that a fragile ceasefire could collapse and disrupt Middle East oil supplies.
By 3 pm AEST (5 am GMT), Brent crude futures had risen $1.92, or 2.6%, to US$76.08 a barrel, while West Texas Intermediate crude gained $1.84, or 2.6%, to $72.28 a barrel.
Both benchmarks had already rallied on Tuesday after Washington revoked the general licence authorising Iranian crude exports following attacks on commercial vessels in the Strait of Hormuz.
ING commodity strategists said in The Commodities Feed:
"The Iranian attacks saw the U.S. respond in a firm manner, with renewed strikes. There are reports of explosions near the strait. In addition to military strikes, the U.S. revoked a temporary licence that it had previously issued to allow for the sale of Iranian oil.
"While the revocation doesn’t fundamentally change oil market dynamics, it’s important from a sentiment perspective. It heightens the risk of a breakdown in the temporary deal between the U.S. and Iran."
The U.S. strikes were launched after Iranian attacks on three commercial vessels transiting the Strait of Hormuz, according to U.S. Central Command.
Following last month's ceasefire agreement between Washington and Tehran, oil prices had retreated to pre-conflict levels as traders built sizeable short positions on expectations that additional Middle Eastern supply would return to global markets.
Those expectations have now been thrown into doubt.
A Saudi-flagged crude oil tanker, believed to be the supertanker Wedyan, was also reportedly damaged off the coast of Oman, although the cause has not been confirmed.
The incidents have renewed concerns over shipping through the Strait of Hormuz, a vital waterway that carried around one-fifth of global energy supplies before the conflict began in February.
Meanwhile, the American Petroleum Institute reported that U.S. crude oil inventories fell by 399,000 barrels last week.
Markets had expected a larger drawdown of 1.5 million barrels for the week ended 3 July.
