US Oil Soars 10 Percent in Week on Fears of War with Iran
TEHRAN (Tasnim) – Oil futures rallied Friday with US crude up 10 percent in the week and global benchmark Brent gaining 5 percent on fears of a military confrontation between the US and Iran that would disrupt flows from the Middle East, which provides more than a fifth of the world’s oil output.
“A lot of the oil produced in the world comes from very troubled areas, and occasionally we get reminders of that,” said Gene McGillian, vice president at Tradition Energy in Stamford, Connecticut.
The rise in US-Iranian tensions has largely driven the gains. An early July meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies to reassess production targets and a potential softening of trade tensions between the United States and China were also supporting prices.
Brent crude was up 90 cents at $65.35 a barrel at 10:30 a.m. EDT (14:30 GMT), on course for its first weekly gain in five weeks of 5.4 percent. US West Texas Intermediate crude was up 67 cents at $57.74 a barrel, on track for a nearly 10 percent increase this week, Reuters reported.
The US benchmark surged 5.4 percent and Brent jumped 4.3 percent Thursday after Iran shot down a drone that was over its own territory.
US President Donald Trump said Friday he had aborted a military strike on Iran because such a response to Tehran’s downing of the unmanned US surveillance drone would have caused a disproportionate loss of life.
A senior Iranian military commander said Iran had refrained from shooting down a US plane with 35 people on board that was accompanying the downed spy drone.
"Along with the US drone, there was also an American P-8 plane with 35 people on board," Brigadier General Amir Ali Hajizadeh, the commander of the Aerospace Division of Iran’s Islamic Revolution Guards Corps (IRGC), told reporters on Friday.
“There is no doubt that a severe disruption to the transit of oil through this vulnerable route would be extremely serious,” consultancy FGE Energy said in a note.
