Key Takeaways:
- The U.S. Navy attacked the TOUSKA on Sunday, spiking Brent crude 5% and risking future ceasefire talks.
- The IRGC launched a retaliatory drone strike, pushing oil prices further up.
- Trump sends reps to Islamabad for a 2nd round of talks to end the conflict or strike Iran’s grid next.
Oil Futures Show Gains After Hostilities Restart in the Middle East
While a ceasefire was announced, and negotiations are taking place between the U.S.- Israel coalition and the Iranian regime, hostilities resumed as the Trump Administration attacked an Iranian cargo ship trying to bypass the ongoing naval blockade on the Strait of Hormuz on Sunday.
President Trump announced that an Iranian-flagged cargo ship named TOUSKA tried to go through the naval blockade, and the U.S. Navy stopped it by “blowing a hole in the engine room.” Trump stressed that the vessel was under international sanctions and had a history of illegal activity. He added that TOUSKA was seized and in full custody of U.S. forces.
Iranian authorities vowed swift retaliation over this incident, and according to Iranian media reports, the Islamic Revolutionary Guard Corps (IRGC) launched drone strikes on American vessels, which might be considered a violation of the ceasefire reached.
Markets reacted swiftly to these developments as future contracts of the two main oil benchmarks, the West Texas Intermediate (WTI) and the Brent, rose over 5% during the session, with the former reaching over $90 and the latter surpassing $95, experiencing constant volatility over the announcement and events linked to the geopolitical instability.
Nonetheless, Trump clarified that, despite these offenses, he would send representatives to Islamabad to attend the second round of negotiations to end the current conflict. “We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran. NO MORE MR. NICE GUY!” he highlighted on Truth Social.
“IT’S TIME FOR THE IRAN KILLING MACHINE TO END!” he concluded.