Crude surged on renewed geopolitical risk as US revokes Iran export licence following vessel attacks

Global crude benchmarks surged by approximately 3% as a sudden escalation in Middle Eastern military hostilities and stricter US sanctions abruptly revived the market's war-risk premium.

Brent crude futures settled at $74.16, gaining $2.17, while US WTI closed at $70.44, up $1.89, with both contracts extending gains during post-settlement trade.

This expansion marks an abrupt interruption to the multi-month bearish trend, re-injecting supply volatility into a complex that had previously priced out the risk of prolonged maritime disruptions.

The bullish momentum is underpinned by a swift breakdown in regional diplomacy. Following Iranian attacks on three commercial vessels crossing the Strait of Hormuz, Washington revoked the general licence authorising Iranian crude exports and launched retaliatory airstrikes via US Central Command.

This rapid unwinding of June’s bilateral memorandum of understanding exposes the extreme fragility of the regional ceasefire and introduces renewed threats to a transit corridor responsible for a fifth of global daily oil and LNG supply.

Supply risks were further amplified in eastern Europe, where Ukrainian drone strikes disabled eight tankers from Russia's "shadow fleet" overnight. Combined with a commercial crude inventory drawdown of 399,000 barrels reported by the American Petroleum Institute, immediate prompt-month physical availability is tightening across multiple jurisdictions ahead of official US government storage data.

Written by: Aiman Haikal