- Schwab’s Michelle Gibley said crew safety concerns could still restrict oil shipments through the Strait of Hormuz despite President Donald Trump extending risk insurance.
- ING Think analysts said the latest crude price spike echoes the 2022 surge when oil rose above $100 per barrel amid rising inflation.
- Earlier, Iran’s Foreign Minister Seyed Abbas Araghchi warned on X that the U.S. would “bitterly regret” the precedent set by sinking the Iranian frigate IRIS Dena in international waters in the Indian Ocean.
U.S. equities declined in Thursday’s midday trade as the United States-Israel-Iran war entered its sixth day. The Dow Jones Industrial Average tumbled over 800 points at the time of writing, while the S&P 500 index fell 0.9%.
Crude oil prices soared on Thursday after Iran said it had struck an oil tanker with a missile in the northern parts of the Persian Gulf. According to a state media report, the tanker struck by the IRGC Navy was on fire at the time of writing.
U.S. West Texas Intermediate (WTI) crude futures maturing in April soared nearly 6% on Thursday, rising to $79.15 per barrel, compared to the previous closing price of $74.66. Brent crude futures maturing in May gained 4.4%, rising to $85.02 per barrel.
"The U.S. International Development Finance Corporation would need to have some creative operational changes, including the ability to operate in the Middle East, a shift from project-based financing to shipping, and would need a significant acceleration in approvals from the typical six-to-nine month process," said Michelle Gibley, director of international equity research and strategy, Schwab Center for Financial Research.
Gibley added that despite President Donald Trump's extension of risk insurance, concerns about crew safety could limit the level of risk associated with shipping oil through the Strait of Hormuz.
The CNN Fear and Greed Index was hovering in the ‘Fear’ zone at 34.
Tehran Hit By A Missile Attack
According to a Reuters report citing Iran’s ISNA news agency, the country’s capital city, Tehran, experienced a missile attack on Thursday. This was after a warning from the Israeli military that urged residents to leave certain parts of the city.
Earlier, Iran’s Foreign Minister Seyed Abbas Araghchi warned in a post on X that the U.S. will “bitterly regret” the precedent it has set, referring to the sinking of the Iranian frigate Dena in international waters in the Indian Ocean.
Meanwhile, Iran said it struck Kurdish bases in Iraq and targeted separatist groups attempting to enter the country through its western border.
Oil Price Surge Brings Back Memories Of 2022, Say Analysts
Analysts at ING Think stated in a recent note that the current spike in crude oil prices is bringing back the memories of a similar surge in 2022, when they soared above the $100 per barrel level amid rising inflation.
“A potentially stagflationary shock for the global economy, posing a new dilemma for central banks – and not only for those with a dual mandate,” the firm said.
However, ING Think noted that it’s slightly different this time around, since an energy price shock would also hit a slowing labor market. “In 2022, most labour markets were resilient and partially received additional boosts from pandemic fiscal support,” it added.
At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.41%; the Invesco QQQ Trust ETF (QQQ) fell 0.08%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 1.42%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘neutral’ territory.
For updates and corrections, email newsroom[at]stocktwits[dot]com.