Tanker Attacks Prompt U.S. Strikes on Iran; Brent Crude Rises Above 78 Dollars

-Iran ceasefire was agreed last month. The increase followed Iranian attacks on at least three tankers transiting the Strait of Hormuz within 48 hours, including one carrying about 8 million cubic feet of liquefied natural gas. At least four oil and gas tankers turned back from the strait according to ship-tracking data.

Tanker traffic through the strait has stopped. U.S. forces struck targets inside Iran on Tuesday after three tankers came under attack earlier that day, with incidents involving Qatari and Saudi vessels.

Iranian state media reported explosions in Sirik and Bandar Abbas. Washington described the strikes as retaliation for the shipping attacks. Iranian officials accused the U.S. of violating provisions on military operations and territorial integrity in the June memorandum of understanding and condemned the rescinding of temporary oil-export waivers.

Global oil prices had fallen from highs of more than 110 dollars a barrel in late May after the war disrupted flows of about 20 million barrels a day from Gulf producers. The benchmark Dutch TTF gas contract rose more than 2.40 euros to 49.00 euros per megawatt hour while the UK NBP gas contract rose 6 pence to 116.75 pence per therm.

The real test will come after the burial ceremony of Iran’s supreme leader later this week, once the U.S. and Iran show whether there is still an appetite for a diplomatic off-ramp. -Iran negotiations are scheduled until after the funeral ceremonies conclude later this week.