Oil prices surge over 5% on Wednesday

Brent crude futures rose 5.76 per cent to $78.43 a barrel, while US West Texas Intermediate crude gained 5.55 per cent to $74.35 a barrel. Both benchmarks hit their highest levels since June 22 after already rising around 3 per cent on Tuesday following the US decision to revoke a licence allowing the sale of Iranian crude.

Trump’s comments came as tensions escalated after recent US airstrikes on Iran. Analysts said the renewed hostilities have increased fears of attacks on shipping through the Strait of Hormuz, a key route that previously carried around one-fifth of global energy supplies.

The widening of Brent’s three-month timespread into backwardation signalled growing concerns over tighter near-term crude supplies, while ship-tracking data showed at least four oil and gas tankers had turned back from the Strait amid heightened security risks.

Attribution: Reuters