The US Central Command (CENTCOM) said it completed a wave of strikes against Iran’s Islamic Revolutionary Guard Corps (IRGC) targets in Iran early on Wednesday, CNBC reported.
The US and Iran traded a new round of attacks on Tuesday. CENTCOM stated that the recent strikes were carried out in retaliation for Iranian attacks on commercial shipping in the Strait of Hormuz and the recent attack on US troops stationed in the region. US President Donald Trump warned of more attacks to come if Tehran responded.
Explosions were seen over the southern Jordanian city of Aqaba. The semi-official Tasnim news agency reported Iran said it fired missiles at a US base in Jordan. The IRGC said the new fighting “only tightened the lock on the Strait of Hormuz.”
Meanwhile, the United Arab Emirates (UAE) also said it intercepted an Iranian drone over its territorial waters. Kuwaiti military reported the country’s air defences responding to hostile drone strikes after an Iranian attack.
Market reaction
Crude oil prices attract some buyers following news of the strikes. At the time of writing, the West Texas Intermediate (WTI) is up 0.11% on the day at $91.35.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
