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Oil prices jumped around 4% Wednesday, with international benchmark Brent Crude trading briefly over $95 a barrel – a $20 rise since the U.S. and Iran resumed fighting on July 7.
Shippers remain reluctant to transit the Strait of Hormuz, despite U.S. Central Command insisting again Tuesday night that it “remains open.”
Iran has continued to attack vessels in the waterway, as well as U.S. allies across the Persian Gulf and elsewhere in the Middle East.
Ali Mohammadi / Bloomberg via Getty Images
President Trump said Tuesday that the U.S. was “not finished” attacking Iran. The 11th straight night of strikes saw the U.S. target “military logistics infrastructure,” according to the Pentagon, while Iranian state media reported strikes around the country.
Mr. Trump also said he would “take care of” Yemen’s Iranian-backed Houthi rebels if they carry out threats to block access to Saudi Arabia’s Red Sea ports via the Bab el-Mandeb strait, something which – if fully realized – could deal the global economy another blow.
“Our view is that we’ll be … in this $80-to-$90 range, depending on the news flow,” Jay Hatfield at Infrastructure Capital Management told Bloomberg about oil prices. “If we actually have a closed Red Sea, that’s a threat. We haven’t seen that yet. That could shoot us over $100.”
The Houthis have previously tried to cut off shipping through the Red Sea, leveraging the Bab al-Mandeb as a chokepoint. The strait, at the southern end of the Red Sea, is the only route in or out of the body of water apart from the Suez Canal in the north, which offers a much longer, and thus costlier route to the energy markets of Asia via the Mediterranean.
CBS/AP
