WTI surges above $74 as Trump says Iran deal is over

The benchmark crude West Texas Intermediate (WTI), futures on NYMEX, soared 3.2% to near $74.30 during the European trading session on Wednesday, the highest level in two weeks.

Oil prices surged as the confirmation from US President Donald Trump that the memorandum of understanding (MoU) with Iran, which aimed at ending the war in the Middle East, is over, has revived risks of worldwide energy supply disruption.

Speaking at the NATO summit in Ankara, Trump said, “I think the MoU with Iran is over.”

Trump added, “We attacked very powerfully last night, the very dangerous people from Iran. They’re sick; there’s something wrong with them,” Moneycontrol reported.

On Tuesday night, the US Central Command confirmed attacking Iran’s military infrastructure in response to Tehran striking commercial ships transiting through the Strait of Hormuz, a vital passage to almost one-fifth of the world energy supply.

Crude oil prices could gain further if the war in the Middle East restarted. Oil prices gained almost 70% in the first nine days of March when the war in the Middle East started, and Iran closed the Hormuz as a response to collective attacks from the US and Israel.

Currencies from economies that rely heavily on oil imports to meet their energy needs are expected to be major victims of higher oil prices.

(Source: OANDA)