Crude oil prices are up 7% in early trading on July 29 as fighting in the Middle East worsens.
Brent crude oil, the international benchmark, is up 6.5% and trading at $89.52 U.S. a barrel. West Texas Intermediate (WTI) crude, the American standard, is up 7% at $84.26 U.S. per barrel.
Crude oil prices are sharply higher after U.S. President Donald Trump said the U.S. will hit Iran hard in retaliation for a surprise attack on American forces in the Middle East.
Trump’s comments come after the Islamic Revolutionary Guard launched ballistic missiles at U.S. forces stationed in Jordan. U.S. Central Command said the missiles were intercepted.
U.S. and Saudi forces have already struck multiple logistics and weapons sites that had been used by Iran and its supporters.
Iran and its Houthi allies in Yemen are trying to control shipping traffic through the Strait of Hormuz and Red Sea, the two crucial chokepoints for oil exports from the Middle East.
The Iranians have repeatedly attacked oil tankers transiting the Strait of Hormuz and Red Sea.
Despite the tensions, the U.S. and Iran had appeared to pause their fighting earlier in the week, leading to a sharp decline in crude oil prices, which had been above $100 U.S. a week ago.
But now, oil prices are again jumping higher amid the prospect of all-out war between the U.S. and Iran.
The situation is sending gasoline prices at the pumps in America higher as well, with costs nearing $4 U.S. per gallon.
