Oil Climbs as Hormuz Conflict Flares Again; WTI Gains 2.2%

Oil prices rose on June 29 as tensions around the Strait of Hormuz escalated again after military clashes between the US and Iran.

August Brent crude futures settled at $73.15 a barrel on ICE Futures Europe, up 1.6% from the previous session. August West Texas Intermediate crude futures closed at $70.75 a barrel on the New York Mercantile Exchange, gaining 2.2%.

Volatility has increased as the US and Iran continued exchanging military strikes even after signing a memorandum of understanding on June 17 to end the war.

Iran attacked a commercial vessel sailing off the coast of Oman on June 25 after pressuring ships to follow routes it demanded. The US then struck Iranian drone and missile bases. Iran retaliated by attacking US bases in Bahrain and Kuwait, extending the cycle of reprisals.

The US and Iran agreed to halt attacks on each other and plan to meet in Doha on June 30 to try to resolve the dispute over the Strait of Hormuz. Qatar is serving as a key mediator.

“The market is becoming increasingly accustomed to viewing these moves as tactical rather than structural,” Harris Kureshi, chief investment officer at Karobaar Capital, told Bloomberg. “Absent a fundamental shift, traders are choosing to reduce bets on both the upside and the downside.”

Go Jeong-sam, Hankyung.com reporter jsk@hankyung.com