Oils Gains Almost 3% As Iran Warns U.S. To Stay Out Of Mid East Hostilities

Trump will take two weeks to decide whether to join Israeli campaign: File Image/Pixabay

U.S. president Donald Trump stating that a decision to involve the U.S. in Israel/Iran hostilities would take two weeks was one reason why crude prices on Thursday climbed yet again, this time by nearly 3 percent.

Brent settled up $2.15, or 2.8 percent, to $78.85 per barrel, and West Texas Intermediate was up $2.06, or 2.7 percent, to $77.20.

Also escalating tensions between Israel and Iran to the near-flashpoint was the latter's bombing of an Israeli hospital; Israeli prime minister Benjamin Netanyahu said Tehran's "tyrants" would pay the "full price," while Iran warned against a "third party" joining the attacks.

Analysts seemingly had already decided how the near future of the conflict would play out: Rory Johnston, founder of the Commodity Context newsletter, said, "Consensus [in the market] is increasingly forming that we will see U.S. involvement in some way."

JPMorgan warned that if the conflict extends to include a closure of the Strait of Hormuz (which strategists have repeatedly stated is a remote possibility, yet the fear of which has driven crude trading this week), oil could skyrocket to $120 to $130 per barrel.

Mike Sommers, the president of the American Petroleum Institute, said, "We don't see it as a likely scenario at this time, but given the precarious state that the Iran regime is in right now, I think everybody should be watching" the waterway.

Even if Hormuz isn't blocked, Bloomberg pointed out that "Oil analysts and traders currently see about $8 of geopolitical risk premium priced into the market and are bracing for that to rise further if the U.S. joins in on the attacks."

Meanwhile, Iran was reportedly maintaining crude supply by loading tankers one at a time and repositioning floating storage closer to Asia: Kpler estimated that the Islamic republic has loaded 2.2 million barrels per day of crude oil so far this week, marking a five-week high.