Oil prices climb moderately after US bombs Iran
Oil prices rose moderately as the market opened Sunday evening, a sign that traders are concerned, though not panicked, about how Iran may respond to the U.S. bombing of its nuclear facilities over the weekend.
The increase of around 3% left U.S. oil prices hovering around $76 a barrel. That is notably higher than prices were two weeks ago, before Israel struck Iran, but still tame by recent standards.
So far, the conflict between Israel and Iran has damaged oil and gas facilities in both countries, but it has not meaningfully affected the flow of energy.
The big question is whether Iran will seek to change that. If it were to disrupt the flow of oil and natural gas in the Persian Gulf region, the economic toll would be steep, including for Iran. That is because a large portion of the world's oil and liquefied natural gas, or LNG, passes through the Strait of Hormuz, a waterway that hugs a portion of Iran's southern border.
Newsweek reported that the Iranian Parliament on Sunday voted in support of closing the strait, according to media reports. Any final decision on retaliation, however, will rest with the country's Supreme National Security Council and leader Ayatollah Ali Khamenei. The parliament vote merely advises him of the option to pursue.
Another risk is if Iran were to attack U.S. military bases in the Middle East.
'If Iran follows through on threats to retaliate against U.S. forces in the region, traders might finally -- after more than three years of geopolitical 'wolf' cries -- price in escalatory pathways that previously seemed far-fetched,' ClearView Energy Partners, a Washington research firm, wrote after the United States bombed Iran.
The war is already increasing energy costs for consumers in the United States. The price of a gallon of regular gasoline climbed nearly 3% last week, to $3.22, according to the AAA motor club. This time last year, the price was $3.45 a gallon. Prices at the pump generally lag oil prices.
Iran's foreign minister, Abbas Araghchi, said Sunday that Iran would respond in 'self-defense' but declined to explain what that might entail.
Iran would have a hard time closing the Strait of Hormuz for a long time, but the country could make passing through it more treacherous, analysts have said. 'Multiple security experts contend that Iran has the ability to strike individual tankers and key ports with missiles and mines,' RBC Capital Markets analysts wrote Sunday.
Last week, two oil tankers collided near the strait as many vessels reported experiencing interference with their GPS systems. The United Arab Emirates attributed the crash to navigational errors.
Around a fifth of the world's oil and related products flows through the Strait of Hormuz each day, according to the U.S. Energy Information Administration. A similar share of LNG, or natural gas that has been cooled for shipment, also makes the journey.
More than 80% of those fuels go to Asia, meaning those countries would be severely affected by any closing, the energy administration said.
The United States and other countries would feel the effects in the form of higher energy costs.
Vice President JD Vance said Sunday morning that disrupting shipping in the Strait of Hormuz would be 'suicidal' for Iran.
'What would make sense is for them to come to the negotiating table to actually give up their nuclear weapons program over the long term,' he said on the NBC program 'Meet the Press.'
Secretary of State Marco Rubio also warned Iran against closing the strait.
'If they do that, it will be another terrible mistake,' Rubio told Fox News on Sunday. 'It would hurt other countries' economies a lot worse than ours. It would be, I think, a massive escalation that would have merit a response, not just by us, but from others.'
Shipping on high alert in Middle East
The shipping industry was placed on high alert on Sunday with warnings that Tehran could retaliate against commercial vessels following after U.S. airstrikes against Iran's nuclear facilities.
Greece cautioned its ship owners to think again if considering entering the Persian Gulf in the wake of U.S. airstrikes. Vessels planning to sail through the Strait of Hormuz, the waterway that sits at the mouth of the region, should 'reassess passage' until the situation normalizes, according to a circular, seen by Bloomberg that its shipping ministry sent to vessel owners. It advised waiting in nearby safe ports.
Naval forces in the area warned that ships, especially U.S.-linked ones, could be at heightened risk. The actions of the maritime industry — and its risk tolerance — will be a critical detail in the wake of the strikes because of Iran's proximity to the Strait of Hormuz.
Athens' warning is the latest sign of pressure on shipping markets as attacks on Iran escalate. Tanker earnings already soared by almost 90% since Israel first started conducting airstrikes on June 13. As one of the world's largest ship-owning nations, Greece and its advice to vessel owners would have a major impact on commodity transportation markets, especially oil.
There's every chance the advice will be ignored because the Persian Gulf is too important a region for shipowners to avoid and rates can always rise to compensate for the risk of sailing in the region. Shipowners that do decide to transit Hormuz should adopt the highest security level available and maintain the maximum possible distance from Iranian waters, Greece's ministry added.
In Sunday's notice, the Greek ministry cited concern around a possible closure of Hormuz as a reason behind its message.
Officials at three Greek tanker companies said they were still assessing the situation. One did indicate he might still allow his tankers to enter the region, while another said their ships would likely stay away.
Calls and emails to the ministry weren't immediately responded to outside usual working hours.
Naval groups are also warning of greater risk.
On Sunday, the Joint Maritime Information Center, a liaison between navies and merchant shipping in the region, said that the U.S. airstrikes mean U.S.-linked ships sailing through the Red Sea and Gulf of Aden face a high risk of attack.
Yemen's Houthi rebel group issued fresh threats against U.S. commercial and naval ships earlier in the day. There had been a ceasefire between the U.S. and the Houthis in early May, geared toward limiting the group's attacks on the U.S. navy. U.S.-linked ships should consider rerouting, the JMIC said in its update.
Separately, the European Union's naval force in the region raised its threat assessment for U.S.-linked vessels as a result of the strikes. It now sees a severe threat to ships linked to the U.S. and Israel and a low risk for all other ships.
'This does not exclude the possibility of all merchant vessels being targeted in the future,' it said in an update published by France's MICA Center, which helps coordinate global maritime security.
Bloomberg News and dpa contributed to this report.
This article originally appeared in The New York Times.
Copyright 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Chicago Tribune
27 minutes ago
- Chicago Tribune
Oil flip-flops and shares are mixed after the US strikes Iranian nuclear sites
BANGKOK — Global markets appeared to take the U.S. strike against nuclear targets in Iran in stride as investors watched Monday to see how Iran will react. The price of oil initially jumped more than 2%, fell and then regained about half that much. U.S. stock futures edged lower and share benchmarks in Europe and Asia also were mostly lower. The attacks on three Iranian sites raised the stakes in the war between Israel and Iran and left questions about what remains of Tehran's nuclear program. It also increased the possibility that Iran might retaliate, potentially disrupting shipping through the narrow Strait of Hormuz, a waterway through which much of the world's crude oil passes. The big unknown is what Iran will do, analysts said. The price of Brent crude oil, the international standard, was up 1.2% at $77.91 per barrel. U.S. benchmark crude climbed 1.3% to $74.79. The future for the S&P 500 was little changed, while that for the Dow Jones Industrial Average was down 0.1%. Treasury yields were steady. In Europe, Germany's DAX lost 0.5% to 23,230.54 and the CAC 40 in Paris fell 0.6% to 7,541.25. Britain's FTSE 100 shed 0.2% to 8,761.53. Overall, there was no sign of panic. 'I believe what we are thinking is or the thinking is that it is going to be a short conflict. The one big hit by the Americans will be effective and then we'll get back to sort of business as usual, in which case there is no need for an immediate, panicky type of reaction,' said Neil Newman, managing director of Atris Advisory Japan. The conflict began with an Israeli attack against Iran on June 13 that sent oil prices yo-yoing and rattled other markets. Closing off the Strait of Hormuz would be technically difficult but it could severely disrupt transit through it, sending insurance rates spiking and making shippers nervous to move without U.S. Navy escorts. As a major oil producer, Iran may be reluctant to close down the waterway, which is used to transport its own crude, mostly to China. Oil is a major revenue source for the regime. 'The situation remains highly fluid, and much hinges on whether Tehran opts for a restrained reaction or a more aggressive course of action,' Kristian Kerr, head of macro strategy at LPL Financial in Charlotte, North Carolina, said in a commentary. Speaking to Fox News on Sunday, U.S. Secretary of State Marco Rubio said disrupting traffic through the strait would be 'economic suicide' and would elicit a U.S. response. 'I would encourage the Chinese government in Beijing to call them about that because they heavily depend on the Strait of Hormuz for their oil,' Rubio said. When asked about that at a routine briefing in Beijing, Chinese Foreign Ministry spokesperson Guo Jiakun told reporters in Beijing that 'China is willing to strengthen communication with Iran and relevant parties to continue playing a constructive role in promoting de-escalation' of the conflict. 'The Persian Gulf and its adjacent waters are important international channels for cargo and energy trade. Maintaining security and stability in this region serves the common interests of the international community,' he said. Tom Kloza, chief market analyst at Turner Mason & Co said he expects Iranian leaders to refrain from drastic measures and oil futures to ease back after the initial fears blow over. Disrupting shipping would be ' a scorched earth possibility, a Sherman-burning-Atlanta move,' Kloza said. Writing in a report, Ed Yardeni, a long-time analyst, agreed that Tehran leaders would likely hold back. 'They aren't crazy,' he wrote in a note to investors Sunday. 'The price of oil should fall and stock markets around the world should climb higher.' Other experts weren't so sure. Countries are not always rational actors and Tehran could lash out for political or emotional reasons, said Andy Lipow, a Houston analyst who has covered oil markets for 45 years. 'If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel,' Lipow said. That would translate to about $4.50 a gallon at the pump and hurt consumers in other ways, he said. Much of East Asia depends on oil imported through the strait. Taiwan's Taiex fell 1.4% while the Kospi in South Korea slipped 0.2%. In Tokyo, the Nikkei 225 edged 0.1% lower, with gains for defense contractors, oil companies and miners helping to make up for broad losses. 'The U.S. strike on Iran certainly is very good for defense equipment,' Newman of Atris Advisory said, noting that both Japan and South Korea have sizable military manufacturing hubs. Australia's S&P/ASX fell 0.4%. Hong Kong's Hang Seng regained lost ground, climbing 0.7%, while the Shanghai Composite index picked up 0.7%. In currency dealings, the U.S. dollar rose to 147.82 Japanese yen from 146.66 yen. The euro fell to $1.1464 from $1.1473.
The Hill
29 minutes ago
- The Hill
Leavitt: ‘High degree of confidence' strikes hit Iran's stored enriched uranium
White House press secretary Karoline Leavitt said Monday the Trump administration has a 'high degree of confidence' that its strikes against Iran hit locations where enriched uranium was being stored amid questions about whether officials in Tehran had relocated the nation's stockpile. 'We are confident, yes, that Iran's nuclear sites were completely and totally obliterated, as the president said in his address to the nation on Saturday night,' Leavitt said on ABC. 'And we have a high degree of confidence that where those strikes took place is where Iran's enriched uranium was stored,' she added. 'The president wouldn't have launched the strikes if we weren't confident in that. So this operation was a resounding success.' The U.S. on Saturday struck three Iranian nuclear facilities: Fordow, Natanz, and Esfahan. President Trump described them in an address to the nation as 'completely and totally obliterated,' something he reiterated in a social media post late Sunday. But experts have acknowledged it would take time to determine the extent of the damage from U.S. strikes, and some reports raising the possibility that Iran moved some of its enriched uranium away from those sites ahead of the attack. 'Final battle damage will take some time, but initial battle damage assessments indicate that all three sites sustained extremely severe damage and destruction,' Chairman of the Joint Chiefs of Staff Gen. Dan Caine said Sunday. The New York Times reported that there was evidence Iran had moved equipment and uranium from the Fordow site in recent days, citing two Israeli officials. The Times also cited text messages from the head of the International Atomic Energy Agency indicating Iran had moved its uranium stockpile. Trump administration officials have maintained that the purpose of the strikes was to decimate Iran's nuclear program and severely curtail Tehran's ability to develop a nuclear weapon. 'We're not at war with Iran. We're at war with Iran's nuclear program,' Vice President Vance said Sunday on NBC News's 'Meet the Press.'
UPI
37 minutes ago
- UPI
Britain, U.S. warn Iran against Strait of Hormuz blockade
U.S. Secretary of State Marco Rubio (R) and Britain's Foreign Secretary David Lammy (L) at a meeting at NATO Headquarters in Brussels in April. File Photo by NATO/UPI | License Photo June 23 (UPI) -- Britain cautioned Iran Monday that attempts to block the Strait of Hormuz or to strike at American military facilities in the Middle East could lead to escalation, even as Israel continued its strikes on Iran. British Foreign Secretary David Lammy said Monday that such actions would be a "catastrophic mistake." "It would be a huge, catastrophic mistake to fire at U.S. bases in the region at this time. We have forces in the region at this time," said Lammy in an interview with BBC Breakfast. The Iranian parliament moved Sunday to approve a measure to close the Strait in response to the American strikes on Iran over the weekend. The strait serves as a critical route for oil being shipped from Persian Gulf countries, but ultimately it will come down to whether Iran's Supreme Leader Ayatollah Ali Khamenei decides to move forward with such a plan. Close to 30% of the world's seaborne oil shipments are moved through the strait. U.S. Secretary of State Marco Rubio also commented Sunday against Iranian interference with movement through the strait. He spoke with Fox News and called on China to prevent Iran from closing the Strait of Hormuz. "I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil," said Rubio, as China is a key oil customer of Iran. "The Persian Gulf and nearby waters are important route for international trade in goods and energy. Keeping the region safe and stable serves the common interests of the international community," Chinese Foreign Ministry Spokesperson Guo Jiakun said in a press conference Monday. "China calls on the international community to step up effort to promote de-escalation of the conflict and prevent the regional turmoil from having a greater impact on global economic growth." Meanwhile, Israel Defense Forces announced Monday on social media that it "struck routes in order to obstruct access" to the Fordow nuclear enrichment site in Iran's Qom province. The IDF also proclaimed it attacked six Iranian airports "across western, central, and eastern Iran, destroying runways, underground hangars, refueling aircraft, F-14, F-5 and AH-1 aircraft." It further alleged the strikes "impaired takeoff capabilities from these airports, as well as the Iranian military's ability to operate its air force from them."
