Uche Cecil Izuora
Crude oil futures has continued its upward price hike trajectory rising in early trading on Monday, sending Brent crude to a five-month high above $80/bl, after the US bombed Iran’s nuclear sites.
The front-month August Brent contract on Ice rose by 5.7 per cent to a high of $81.40/bl shortly after trading got underway in Asia. Brent last closed above $80/bl in January. Prices later eased, with Brent trading at $78.92/bl at 7:40am Singapore time.
The Nymex front-month August WTI contract rose by 6.2 per cent to a high of $78.40/bl, before dropping back to $75.74/bl.
The US carried out air strikes on Iran’s Fordow, Natanz and Isfahan nuclear sites early on 22 June local time. The strikes were a “spectacular military success” and the sites have been “completely and totally obliterated”, US president Donald Trump said.
The International Atomic Energy Agency (IAEA) confirmed the attacks and said it had identified extensive damage to the Isfahan site in particular. It said the extent of damage to the Fordow facility, which is heavily fortified and built inside a mountain, is unclear.
Radiation levels at the sites have not increased following the strikes, it said, citing Iranian authorities.
Iran’s foreign ministry condemned what it described as “brutal military aggression” by the US against its nuclear facilities.
It remains unclear how Tehran will respond to the attacks. Any attempt by Iran to close the strait of Hormuz would be “a terrible mistake,” US secretary of state Marco Rubio said on 22 June.
The strait is the global oil market’s single most vulnerable chokepoint, through which pass about 17mn b/d of crude and products, or about a quarter of seaborne oil trade.
“It’s economic suicide for them if they do it, and we retain options to deal with that,” Rubio said.