U.S. oil tops $100 as Trump threatens strikes on Iran’s crude facilities
US crude oil prices rose above $100 per barrel on Sunday evening as the Trump administration focused on military strikes against key oil export facilities on OPEC member Iran’s Kharg Island.
US crude oil oil rose 2.64% to $101.32 a barrel as of 10:15 a.m. ET. Brent International benchmark prices increased by 2.94% to $106.17 per barrel.
President Donald Trump ordered an attack on Iranian military assets on Kharg Island on Friday. Trump said the attacks did not damage oil infrastructure. But he warned that if Iran continued to attack tankers in the critical Strait of Hormuz, the United States would consider striking crude oil facilities on the island.
US officials said the White House plans to announce starting this week that many countries have agreed to accompany oil tankers through the Bosphorus. Wall StreetJournal. But officials who spoke to the Journal said they were still debating whether such an operation would begin before or after the war ended.
US Ambassador to the United Nations Mike Waltz reiterated Trump’s threat to attack the oil infrastructure on the island. About 90% of Iran’s oil exports are shipped there, according to JPMorgan. Iran produced approximately 3.2 million barrels of oil per day in February. OPEC data.
“For now, it has only deliberately hit military infrastructure,” Waltz said. CNN in an interview on Sunday. “And if he wants to disable energy infrastructures, I think he will certainly pursue that option.”
The U.S. attack on Kharg Island and Trump’s threat to strike Iran’s oil infrastructure mark a major escalation in the war, Natasha Kaneva, JPMorgan’s head of global commodity strategy, said in a note to clients Friday.
A direct attack on Iran’s export terminal on the island would immediately halt most of Iran’s 1.5 million barrels per day of crude exports, Kaneva said. He said this would likely trigger “serious retaliation” by Iran “in the Strait of Hormuz or against regional energy infrastructure.”
Iran’s attacks on oil tankers in the Persian Gulf have already fundamentally halted traffic in the Bosphorus, the most important trade route for the global crude oil market. About 20% of the world’s oil supply passed through the narrow waterway before the war.
The closure of the Bosphorus, which connects the Gulf to the world market, triggered the largest oil supply disruption in history. Oil prices have risen more than 40 percent since the United States and Israel attacked Iran three weeks ago. Brent closed above $100 last week for the first time in four years.
Prices are rising despite the decision of more than 30 countries to release 400 million barrels of stockpiled oil to address the supply disruption. This is the largest such action in history. The United States will extract 172 million barrels of oil from the Strategic Petroleum Reserve as part of the effort.
based in paris International Energy Agency, Asian countries will immediately begin releasing emergency oil supplies, the company coordinating the effort said Sunday. Countries in America and Europe will begin to release their stocks by the end of March.
US Energy Secretary Chris Wright said on Sunday that there is no guarantee that oil prices will fall in the coming weeks.
“There are no guarantees in wars,” Wright said ABC News in an interview. “I can guarantee that the situation would have been much worse if it had not been for this military operation to neutralize the Iranian regime.”
