Global energy markets are back on alert after the US military launched new airstrikes on Iran.
This drastic action was followed by the cancellation of Iran's global oil export waivers, thus putting the newly reached ceasefire agreement in jeopardy.
This aggressive US step was taken after a series of continuous attacks on commercial merchant ships in the world's most critical maritime route, the Strait of Hormuz.
Peace Agreement Threatened, WTI Oil Prices Soar
According to an official statement from the US Central Command (CENTCOM) on platform X, the "strong attack" was carried out to impose a high cost on those who targeted commercial ships piloted by civilians. The attack reportedly targeted Iranian air defense systems and weapon launchers.
The simultaneous actions of the US military and the Treasury Department had a direct impact on the market:
WTI Crude Oil: The price of West Texas Intermediate (WTI) crude oil jumped above $72 per barrel immediately after news of the fighting broke.
Commodity Gold Falls: Gold prices recorded a decline due to investor concerns that the surge in energy prices will prompt the Federal Reserve (Fed) to raise interest rates.
Gloomy Peace Prospects: The US move is the biggest threat to the interim agreement signed by the leaders of the two countries on June 17, and risks damaging the permanent 60-day peace talks.
For the record, the price of global benchmark Brent oil once peaked at $125 per barrel in late April, two months after the US and Israel began a military campaign against Iran, before stabilizing earlier this month.
‘Cauldron of Fire’ Tactics and the Struggle for Control of the Strait of Hormuz
Behind the scenes of the conflict, both sides are now accusing each other of violating the terms of the ceasefire.
The US has blamed Iran for the sharp increase in ship attacks in the Strait of Hormuz, while Iran's Deputy Foreign Minister Kazem Gharibabadi described the US operation and the cancellation of the oil waiver as a violation of the agreement and vowed to take strong countermeasures.
The US military revealed that Iran is trying to use military tactics to control the shipping lanes:
Iranian tactics: US Chief of Naval Operations, Admiral Daryl Caudle, revealed that Iran has planted mines in the strait. The aim is to prevent merchant ships from using the safe passage near Oman and force them through northern waters that are tightly controlled by Iran.
Expert Opinion: Bob McNally, President of Rapidan Energy Group, said that the cancellation of the oil waiver by the US is a clear signal to the previously complacent market, indicating that the ceasefire is not as strong as it was thought.
Negotiations Suspended for Now
The negotiation process between the two countries has had to be suspended for a while. This is because Tehran is holding mourning ceremonies and a funeral for the late Supreme Leader, Ali Khamenei, who was killed on the first day of the war in late February.
The deceased is scheduled to be buried in his hometown of Mashhad on July 9. Qatar, as the mediator, said that the next round of talks would be rescheduled as soon as the ceremony is over.
The latest military action is a sign of the US administration's frustration with Iran's compliance. With markets now having to reassess geopolitical risks that have resurfaced, crude oil market volatility is expected to remain aggressive in the near future.
