Crude oil prices jump over $102/bbl as Iran attacks three ships amid US blockade; COMEX gold down 0.7%

Crude oil prices jumped over $102 per barrel (bbl) during the early market hours on Thursday, April 23, after reports emerged of Iran attacking three ships in the Strait of Hormuz amid the ongoing ceasefire deal with the United States and the military blockade imposed by America at the key trading route.

Investors were trading based on caution and uncertainty related to the escalating US-Iran conflict, despite the ceasefire deal, which has now been extended till further notice, giving Iran the opportunity to propose a potential peace deal.

The global benchmark Brent crude oil prices jumped to near $106 per bbl in the early hours on April 23, Indian time, after the futures opened around the $101 per bbl region. On Wednesday, the oil prices remained elevated, opening close to the $99 per bbl levels only to later surge to $102 per bbl during the trading session.

The West Texas Intermediate (WTI) crude oil futures also surged to $97.19 per bbl levels in the early market session on Thursday, after opening around the $92 per bbl region. During the previous trading session, the crude oil prices were around $93 per bbl levels.

Oil prices today

Brent crude oil prices were trading 1.35% higher at $103.28 per bbl as of 7:55 am (IST) on Thursday, April 23, compared to $101.91 per bbl at the previous commodity market close, according to Investing.com data.

The US-based WTI crude oil prices were trading 1.45% higher at around $94.24 per bbl as of 7:56 am (IST), compared to $92.96 per bbl at the previous trading close, as per the exchange data.

US-Iran conflict update

According to an AP report, Iran fired on three cargo ships while seizing two of them, marking an escalation within one day after US President Donald Trump extended the US-Iran ceasefire deal, maintaining the US blockage at the key trading route of the Strait of Hormuz.

The US-Iran conflict has strained the exports through the key trading passage for the Gulf oil exports to foreign nations, in turn spiking the oil prices in the futures and spot markets.

The report also highlighted that Iran’s Revolutionary Guard said that the forces were bringing those two ships to their country. However, the White House reportedly said that those ship seizures did not violate the ceasefire deal between the two countries at war.

Pressure still maintains over the supply concerns via the trading route, as any sharp impact on exports is likely to flare up oil prices in the global market.

Media reports also suggest that Iran’s Foreign Minister Abbas Araghchi called the US blockade a violation of the ceasefire agreement between the two nations, and so far, the negotiations of a second round of talks towards the peace deal remain uncertain.

The New York Mercantile Exchange-based COMEX gold prices were trading 0.77% lower at $4,716.60 per ounce as of 10:47 pm (EDT) on Wednesday, April 22, compared to $4,753 per ounce at the previous commodity market close, as per the data.

The Bloomberg US dollar spot index (DYX) data showed that the US greenback was up 0.05% at 98.635 levels as of 10:47 pm (EDT) on April 22, compared to the previous currency market close levels, due to the renewed demand for the benchmark note.

Precious metal gold prices fell under pressure from the rising US dollar demand due to the rising uncertainty in the market. Investors tend to pull their money out of riskier bets into the safe-haven US dollar, increasing the value of the currency.

In the case of commodity traders, the buyers of gold buy less of the precious metal due to the higher US dollar rate in the market, as they will receive less of the commodity at a higher currency price, marking an inverse relationship.