Oil prices extend gains in Asian early trading as Iran strikes hostile targets in the Strait of Hormuz
Source: Global Markets Broadcast
Crude oil extended its gains in early Asian trading, following reports that Iran attacked "hostile targets" in the Strait of Hormuz, and Tehran is also seeking to ban US and Israeli vessels from entering this vital waterway.
West Texas Intermediate futures, which rose nearly 3% in the previous session, broke through $78 per barrel, while Brent hovered around $82 per barrel. Iran’s semi-official Fars news agency reported that the attack occurred on Thursday night local time, after two explosions were heard near Qeshm Island in the Strait of Hormuz.
An agreement between Iran and Oman to partially reopen the Strait of Hormuz has reached its final stage.
As optimism about a full reopening of the Strait of Hormuz fades, crude oil prices have recouped most of their earlier losses this week. Details disclosed by Iranian media on the deal between Iran and Oman indicate that Tehran is seeking to prohibit US and Israeli vessels from passing through the Strait of Hormuz, and is demanding hostile countries provide compensation before using this crucial shipping route.
"The agreement to reopen the Strait of Hormuz remains elusive, and investors are hesitant," said Rob Haworth, Senior Investment Strategy Director at US Bank Asset Management Group. "Current shipping volumes remain very low and the prospects for a lasting agreement are still unclear."
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