Home / Business / Oil is being propped up by Middle East tensions after the US used video to blame Iran for tanker attacks

Oil is being propped up by Middle East tensions after the US used video to blame Iran for tanker attacks

An oil tanker is seen after it was attacked at the Gulf of Oman, in waters between Gulf Arab states and Iran, June 13, 2019. ISNA/Handout via REUTERSReuters

  • Oil prices on Friday were pushed and pulled between competing drivers of Iran tensions and a supply glut.  
  • Thursday’s attacks on two oil tankers raise the prospect of a US-Iran military showdown, experts warn
  • Broadcom shares are trading down 8.7% in US premarket after warning of a demand slowdown from the US-China trade war.
  • Watch WTI and Brent crude trade live


After sinking to a five-month low and surging almost 5% in the same week, oil prices on Friday were pushed and pulled between competing drivers of Iran tensions and a supply glut.  

After crude prices slipped after a surprise increase in US oil inventories last week, the surged on Thursday following attacks on two tankers in the Gulf of Oman. Brent crude hovered at about $52 a barrel in London’s morning.  

The US blamed the attacks on Iran, though Iran denied any involvement. The attacks raise the prospect of a US-Iran military showdown, experts warn

Elsewhere in markets on Friday, futures on the tech-heavy Nasdaq are down 0.6% and European tech stocks are taking a beating after US chipmaker Broadcom warned of a demand slump resulting from trade war tensions and the Huawei saga. Broadcom shares are trading down 8.7% in US premarket.  

Here’s the market roundup as of 9.15 a.m. (4.15 a.m. ET):

  • Crude prices have retreated with West Texas Intermediate down 0.7% at $51.90, and Brent crude down 0.4% at $61.10.
  • Asian stocks climbed with the Shanghai Composite down 1%, the SZSE Component down 1.6%, and Hong Kong’s Hang Seng down 0.7%.
  • European equities fell in morning trading with Germany’s DAX down 0.5%, Britain’s FTSE 100 down 0.2%, and the Euro Stoxx 50 down 0.3%.
  • US markets are poised to open lower. Futures underlying the Dow Jones Industrial Average were down 0.1%, while S&P 500 and Nasdaq futures were down 0.2% and 0.5%, respectively.

For oil, conflicting supply and demand drivers threaten to fuel further volatility. 

“Two opposite forces are in game for oil traders: the global economic slowdown and rising stockpiles pressure the oil prices downwards, while the ongoing tensions in the Middle East push the prices upwards,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

“But the wider picture suggests that the rising expectations of a Federal Reserve rate cut, the US sanctions on Iranian oil and an OPEC+ announcement to at least extend the oil production cuts beyond June could eventually give a short relief to the bulls.”

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