Oil prices settled 3% higher on July 7 and continued to climb after the market closed, following the United States' revocation of the general license that authorized the sale of Iranian crude oil. Brent crude futures rose $2.17, or 3.01%, to settle at $74.16 a barrel, while West Texas Intermediate (WTI) crude increased by $1.89, or 2.76%, to $70.44 a barrel. In post-settlement trading, Brent climbed an additional 96 cents to $75.12, and WTI rose $1.05 to $71.49.

The US also issued a warning that Iran's recent actions in the Strait of Hormuz were "wholly unacceptable" and would result in consequences, following attacks on tankers in this strategic waterway. These incidents have revived concerns over potential disruptions to tanker shipping.

Ajay Parmar, director of energy and refining at ICIS, noted that "further attacks could sporadically appear in the coming months and this will further add to the volatility." UBS analyst Giovanni Staunovo added, "Renewed tensions in the Middle East and concerns over the vessel attacks could drag lower oil exports from the Middle East."

The situation underscores the fragility of the current ceasefire, with the potential for even threats to close the Strait of Hormuz causing significant price spikes. Market observers agree that volatility in oil prices is likely to persist.

Sources