Crude oil futures rose above $86 a barrel as tensions in the Middle East intensified. US forces struck two Iranian rocket launchers on Larak Island, marking a resumption of direct hostilities between the US and Iran after roughly a month-long pause. President Trump reportedly warned, “We’re going to hit them very hard,” following Iran’s claim that it had attacked two US bases in Jordan in retaliation. He also broadened military threats to include Kharg Island, Iran’s main oil export terminal.
Recent strikes on refineries in both the Middle East and Russia have further tightened global refining capacity, driving refined-product margins to new highs. At the same time, the US Strategic Petroleum Reserve has been drawn down to near its minimum operational level amid rising crude exports.
Adding to supply concerns, a supertanker caught fire after reportedly striking two naval mines in the southern Strait of Hormuz, according to Iranian state media. In response to the disruptions, Asian importers such as China, Japan and South Korea have turned to distant suppliers, including Argentina, to offset lost Middle Eastern supply.
