Oil prices jump 4% as Rubio says Iran ‘not serious’ about peace talks

Oil prices rose 4 percent on Wednesday morning after the United States launched its 11th consecutive attack on Iran overnight, after U.S. Secretary of State Marco Rubio said the Strait of Hormuz remained a sticking point between the two sides.

Shortly after 04:00 ET, global benchmark Brent crude futures July delivery increased almost 4% to $94.23. Approval US West Texas Intermediate crude oil Futures were up 3.8% at $87.46.

At the ASEAN Foreign Ministers meeting in the Philippines on Wednesday, US Secretary of State Marco Rubio said Washington remained committed to diplomacy but accused Tehran of violating the two sides’ agreement on the Strait of Hormuz.

“The problem we have now is that they are not serious about negotiations,” he said. “If they are serious, we are serious too. If they are not, then we will do what is necessary to protect both our own interests and the interests of our allies.”

Tuesday saw U.S. Central Command launch its eleventh consecutive nighttime strike against Iran.

Centcom forces targeted Iran’s military operations centers, maritime capabilities, aircraft hangars, drone storage facilities, and military logistics infrastructure.

The military unit said the attacks were completed with the aim of “further weakening Iran’s ability to threaten commercial shipping in the Strait of Hormuz.”

The strait, a critical shipping route for oil and other vital goods, remains a sticking point in bilateral talks, Rubio said Wednesday, claiming Iran is “claiming the right” to control the waterway. He added that allowing this to happen would set a “very dangerous precedent” for the world.

Deutsche Bank’s Jim said: “With no breakthrough on Iran, the market’s focus has turned to inflation over the last 24 hours as Brent crude closed above $90 a barrel for the first time in over a month, reigniting fears of a broader stagflationary shock. “And this morning we saw a further rise above $92 a barrel, so the US has made an 11th consecutive move against Iran overnight. “There is little sign that oil prices will ease with his confirmation that he has completed the evening of attacks.” Reid said in a memo Wednesday morning.

As energy prices continue to rise, investors have increased their bets on the Federal Reserve’s hawkish policy measures.

“The probability of an interest rate increase in July has increased to 26 percent” [Tuesday’s] “This close is the highest level since last week’s downward surprise in the US CPI report,” Reid wrote in his article on Wednesday. “The day before the CPI was at 45% and the next day it dropped to 10%.”

According to CME’s FedWatch tool, as of Wednesday morning, money markets were pricing the probability of the Fed raising interest rates this month at 24.1%, and the probability of an interest rate increase of at least a quarter point in September at 69%.

Analysts at ING said in a note published Wednesday morning that there are “increasing supply risks” in energy markets as hopes for a temporary ceasefire between the United States and Iran fade.

“The disruptions facing the market do not end in the Middle East. In the Black Sea, Russia’s CPC terminal has stopped receiving oil from Kazakhstan, with loadings suspended following ongoing attacks on tankers.”

“The longer the suspension period, the greater the likelihood that Kazakhstan will have to curtail upstream production. Volumes shipped from the CPC terminal are significant, with approximately 1.7 million b/d loading in June.”