US air strikes on Iranian missile sites and vessels, including claims of mine-laying in the Gulf, lifted oil prices and strained a fragile peace process. Brent crude rose about 3% to around $99.16 a barrel in London, reversing a Monday sell-off that had taken it to $97.76. The strikes occurred as Iran’s negotiating team arrived in Doha to extend the April ceasefire and pursue a phased reopening of the Strait of Hormuz. US Central Command said the action was narrow and aimed at defending forces while using restraint during the ceasefire. UK small and medium-sized businesses faced renewed fuel and energy price pressure after earlier progress had eased forecourt costs. US Secretary of State Marco Rubio said a deal remained possible but depended on whether a good agreement could be reached.
"The oil price has lurched higher again after the United States launched a fresh round of air strikes on Iranian missile sites and vessels Washington claims were laying mines in the Gulf, pushing the already-fragile peace process to the brink and dashing hopes of a near-term reopening of the Strait of Hormuz."
"Brent crude, the international benchmark, was changing hands 3 per cent higher at around $99.16 a barrel by mid-morning in London, although that still leaves it below Friday's close of just over $103. The bounce reverses a sharp Monday sell-off that had taken Brent to $97.76, its lowest level in more than a fortnight, as traders piled into the view that a US-Iran rapprochement was finally within touching distance."
"Captain Tim Hawkins, a spokesman for US Central Command, insisted the latest action was narrow in scope. The strikes, he said on Monday, were designed to "defend our forces while using restraint during the ongoing ceasefire". For the energy market, however, restraint is in the eye of the beholder. Iran's negotiating team had only just touched down in Doha to thrash out an extension of the April ceasefire and a phased reopening of Hormuz when the Tomahawks flew."
"For Britain's small and medium-sized businesses, the timing could scarcely be worse. As Business Matters reported earlier this week, the ceasefire framework agreed in April had been quietly nudging Brent back towards double figures and easing pressure on forecourt prices for the first time since February. Marco Rubio, the US Secretary of State, was at pains on Tuesday to insist that a deal remained on the table."
Read at Business Matters
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