Oil Prices Jump Over 8%: Mukesh Sahdev Warns of a Looming Blockade of the Hormuz Strait
North Sea oil increased 11% to US$78
West Texas Intermediate advanced 7.8% to US$73.7 per barrel
Oil prices jumped amid escalating tensions between Israel and Iran as fears over supply disruptions increased. Benchmark prices surged after Israel had launched military strikes against Iranian targets related to nuclear and military facilities. Brent crude rose 8.7% above US$75 per barrel, North Sea oil increased 11% to US$78, and West Texas Intermediate advanced 7.8% to US$73.7 per barrel.
Israeli leadership demonstrated its resolve. The Prime Minister stated that the strikes aimed to destroy Iran's nuclear infrastructure, ballistic missile factories, and military capabilities, adding, "Until the danger is eliminated," and indicating that the attacks would continue until the Iran threat was removed. Iranian state television reported the assassination of Hossein Salami, commander of the Islamic Revolutionary Guard Corps. Rumors of an Israeli attack emerged on Wednesday and intensified market concerns.
"We were not involved in these attacks. President Trump and his administration took all necessary steps to protect our forces and maintained close contact with our regional allies. Iran should not target U.S. interests or personnel," said Marco Rubio, U.S. Secretary of State, as reported by El Financiero.
Market forces reacted swiftly. Rumors triggered a US$12 per barrel surge on concerns that conflict might reduce Iranian oil supplies and disrupt the Strait of Hormuz—a narrow waterway through which around 25% of global oil trade passed. Analysts warned that closing the Strait could prevent delivery of up to one-fifth of market oil and affect large shipments of liquefied gas from Qatar to Europe.
Supply concerns increased as escalation risk prompted stricter Western sanctions on Iran that could limit its oil sales. Analysts noted that further attacks on Iranian oil installations might reduce output and that conflict in the region could lead to a lower available supply.
Some industry experts balanced the concerns. Mukesh Sahdev, head of oil markets at Rystad Energy A/S, said, "The OPEC+ excess capacity has the potential to offset the loss of Iranian production." Priyanka Sachdeva, senior market analyst at Phillip Nova Pte, said the escalation increased the risk of supply disruptions from major oil-producing countries and contagion while sustained higher energy costs might drive global inflation.
Technical indicators signaled growing apprehension. The near-term Brent crude futures spread deepened into backwardation, reaching US$1.53 per barrel compared to 92 cents the previous day. The spread between the December 2023 and December 2026 contracts exceeded US$2 per barrel, up from 50 cents the day before. These factors erased earlier losses, and oil recorded its largest weekly increase since 2022 along with the highest single-day percentage jump since March 2022.
Other strategists cautioned about the outlook. JPMorgan Chase & Co. warned that oil prices might reach US$130 per barrel in a worst-case scenario in the Middle East. Warren Patterson, head of commodity strategy at ING Groep NV, said, "We are again in an environment of greater geopolitical uncertainty, leaving the oil market on edge and requiring it to start discounting a higher risk premium for any possible supply disruption." Andy Lipow, an analyst at Rapidan Energy Group, warned, "If exports are affected by the Strait of Hormuz, we could see the barrel at US$100," and he added that excluding Iranian oil could raise prices by about US$7.50 per barrel. Bob McNally of Rapidan Energy Group argued that the oil market had been complacent about geopolitical risks and would likely incorporate a higher risk premium in crude oil prices.
Additional measures underscored the impact of the developments. U.S. government employees and their families in Israel faced travel restrictions outside urban areas, while gold prices surpassed US$3,425 per ounce as investors sought refuge amid uncertainty. Earlier, threats from Tehran prompted the U.S. to order employees to leave its Baghdad embassy after Tehran warned that it might target U.S. assets.
Diplomatic efforts remained uncertain. Before the Israeli strikes, the United States and Iran had scheduled a sixth round of nuclear talks in Oman, underscoring the delicate regional balance. With a third of global crude oil production represented in the region, the escalation reflected a risk to energy supplies worldwide.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
DW
an hour ago
- DW
What Ukrainians expect of the Putin-Trump summit – DW – 08/13/2025
Are Ukrainian experts and politicians optimistic about the upcoming talks between US President Donald Trump and his Russian counterpart Vladimir Putin in Alaska? Or do they doubt there will be a real breakthrough? Soon after the August 15 meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska was announced, Ukrainian President Volodymyr Zelenskyy put out a video warning against excluding his country from the talks: "Any decisions made against us, any decisions made without Ukraine, are decisions made against peace. They will not work." Many Ukrainians share this view, according to a survey conducted by the Kyiv International Institute of Sociology (KIIS) in late July and early August. "Ukrainians remain open to negotiations and making difficult decisions," Anton Hruschezkyj of KIIS told DW. "The absolute majority, however, continues to reject demands for [Ukrainian] surrender." According to the survey, 76% of Ukrainians reject Russia's "peace plan" and the idea of making concessions to Russia. At the same time, 49% oppose the US peace plan that entails security guarantees for Ukraine from European countries but not from the US, recognizes Crimea as part of the Russian Federation, maintains Russian control over Ukraine's occupied territories, and lifts sanctions against Russia. Ukrainians do not rule out that the upcoming negotiations between Putin and Trump, which will not have Ukrainian or European representatives present, will be aimed at forcing Ukraine to capitulate. "The Russians never changed their negotiating stance and will not do so as long as they do not suffer serious military and political defeats," Volodymyr Horbach of the Ukrainian Institute for Northern Eurasia Transformation (INET) told DW. The fact that Trump is talking to Putin without first pressuring Russia to change its stance shows that this approach is doomed to failure, Horbach says. "The Russians will stick to their position and want to offer a ceasefire in return for Ukraine's de facto surrender, in other words, fulfilling Russian demands. So calling this concessions is very naive," Horbach said. The analyst does not regard the upcoming Putin-Trump talks as a disaster, but says they signal an "alarming trend" as Trump is "legitimizing Russian war criminal Vladimir Putin, which is unacceptable to Ukraine and Europe." Horbach said he sees "no possibility of implementing any real, practical outcomes of these negotiations in the context of the Ukrainian-Russian war. The proposals that Putin may make will satisfy neither Ukraine nor the European Union." He added that "Trump will have to maneuver, he will not be able to force Ukraine and its European partners to accept Putin's terms." Ukraine was in a similar situation in March 2025, says Dmytro Levus, who heads the Ukrainian Meridian Social Research Center. At the time, Donald Trump believed that the war could be quickly ended by negotiating with Russia and enforcing a peace agreement based on Ukraine's surrender. Lifting sanctions on Russia, however, proved impossible, as most of them had been imposed by the Europeans, Levus said. He believes that after this Alaska meeting, the US and Russia will once again have to face reality — Ukrainian forces continue defending their country and Ukrainian's European partners will not unconditionally accept and implement any deal agreed between Putin and Trump. "Ukraine's position, as stated by Zelenskyy, is clear and correct: the [Ukrainian] constitution does not allow for the ceding of [Ukrainian] territory," Levus told DW. "That is why I do not expect anything meaningful to come out of the Alaska meeting." Iryna Herashchenko, one of the leaders of Ukraine's opposition European Solidarity Party, says the Putin-Trump meeting represents a challenge for the entire international security system. She explains that it would signal to the whole world that violence can go unpunished if Russia, the aggressor, is rewarded for its attack on Ukraine, for annexing parts of the country and for committing war crimes. That is why Herashchenko says recognizing Russian occupation is a red line that must not be crossed. "This would pave the way for new wars, not only in our region," Herashchenko said on Telegram. "That is why all negotiations should be conducted with the participation of Ukraine and the EU, with strict security guarantees, international monitoring, and provisions for sanctions." Anything else would not bring peace, but only lead to new war. Danylo Hetmantsev of Ukraine's rulingServant of the People party takes a more positive view of the upcoming talks, saying the summit will finally reveal Russia's stance. "If there are once again attempts at 'diplomatic maneuvering' instead of productive negotiations at the meeting, this will likely lead to the imposition of tough American sanctions, including on Russia's allies, who will have to pay for supporting the aggressor, which they will not like," Hetmantsev said on Telegram. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video At the same time, Ukrainian experts do not rule out that the US will once again try blackmailing Ukraine into accepting unacceptable conditions after the Putin-Trump summit. Kyiv-Mohyla Academy lecturer and Ukrainian Prism think tank researcher Oleksandr Kraiev believes that Trump could threaten to halt arms deliveries to Ukraine. "But [weapons] deliveries are already sporadic and unsystematic, so it won't be as much of a shock as when Trump first announced something like this," Kraiev told DW. He believes the summit will be purely held for the "sake of talks," as neither side has any real idea of how the war should end. "There could be a joint statement on continuing the talks, but that's all," Kraiev said.
DW
2 hours ago
- DW
Germany rejects US censorship claims in human rights report – DW – 08/13/2025
The report itself has been accused of political bias, with the US softening criticism of Israel and El Salvador. Germany rejected the report saying it has "a very high level of freedom of expression." Human rights, such as freedom of expression, are under threat in Germany and other European countries, according to the 2024 Human Rights Report by the US State Department. The report, which in former years has been seen as a reliable point of reference for global human rights advocacy, has been criticized by human rights groups as containing numerous omissions and mischaracterizations to fit the current US administration's political aims. The German government rejected the report. "There is no censorship in Germany," Deputy Government Spokesman Steffen Meyer said. "We have a very high level of freedom of expression in Germany, and we will continue to defend it in every form," he added. "The human rights situation in Germany worsened during the year," an executive summary of the report's Germany entry said. "Significant human rights issues included restrictions on freedom of expression and credible reports of crimes, violence, or threats of violence motivated by antisemitism," the report said. The report stated, however, that the German government "took some credible steps to investigate, prosecute, and punish officials who committed human rights abuses." The report follows on from comments made by US Vice President JD Vance in February, in which he accused Germany and other European allies of imposing restrictions on free speech and attempting to marginalize far-right parties, including the Alternative for Germany (AfD). His remarks have been described as "intrusive" by German Chancellor Friedrich Merz. The report devotes a much smaller section to Israel than it did last year and fails to mention the severe humanitarian crisis and death toll in the Gaza Strip amid Israel's ongoing offensive against the Palestininian militant group Hamas. El Salvador, which was described in the 2023 report under the Biden administration as having "significant human rights issues," also got off lightly in 2024. "There were no credible reports of significant human rights abuses," the 2024 report said about the Central American country, whose president, Nayib Bukele, is accused of overseeing unlawful and arbitrary killings, torture and harsh prison conditions. The Trump administration's relations with El Salvador have strengthened in recent months, with Washington using a high-security mega-prison in the country to house migrants it has deported under draconian new migration policies. Russia's ongoing invasion of Ukraine was referred to in the report mainly as the "Russia-Ukraine war," though it did say Russia's forces and officials were reported to have committed war crimes, crimes against humanity and abuses in Ukraine. In contrast, countries such as South Africa and Brazil, with whose governments Trump has clashed, came in for severe criticism that was not contained in the 2023 report. The report was issued with a delay as officials appointed by US President Donald Trump altered an earlier draft to bring it into line with his administration's foreign policies and ideological slant. It was prepared after the department underwent a major revamp during which hundreds of people were dismissed, many from the agency's Bureau of Democracy, Human Rights, and Labor, which has a large role in writing the report. In April, Secretary of State Marco Rubio wrote in an opinion piece that the bureau had become a nest of "left-wing activists" and pledged that the Trump administration would change its focus in favor of "Western values." "The report demonstrates what happens when political agendas take priority over the facts," said Josh Paul, a former State Department official and director of nongovernmental organization A New Policy. "The outcome is a much-abbreviated product that is more reflective of a Soviet propaganda release than of a democratic system," he told Reuters news agency. Rights groups Amnesty International and Human Rights Watch have also criticized the report, saying the Trump administration had mischaracterized some records of abuses and omitted others to suit its political agenda. State Department spokesperson Tammy Bruce, however, defended the report, saying it had been restructured to improve readability and to stop it from being a list of "politically biased demands and assertions."
DW
5 hours ago
- DW
Gaza updates: Israeli military approves takeover plan – DW – 08/13/2025
The head of Israel's military has dropped opposition to a planned offensive in Gaza as Hamas leaders arrive in Egypt for ceasefire talks. DW has the Defense Forces (IDF) Chief of the General Staff Eyal Zamir on Wednesday dropped his opposition to Prime Minister Benjamin Netanyahu's plans for a massive military ground operation in the Gaza Strip. An IDF statement said Zamir had "approved the main framework for the IDF's operational plan in the Gaza Strip." Zamir had earlier voiced opposition to the plan due to the risks it presented for IDF soldiers as well as the Israeli hostages still held by Hamas. Wednesday's announcement follows an Israeli Security Cabinet decision last week ordering the offensive, which is aimed at taking complete control of Gaza City and destroying Hamas cells that Israel says are operating in Gaza's main refugee camps. Though no timetable was given for the ground offensive, Israeli warplanes have bombarded the largest city in the Palestinian enclave for days, with Hamas-affiliated health officials claiming that 123 people have been killed there over the past 24 hours. Gaza's civil defense agency, which is also controlled by Hamas, said Israeli bombardments have included "very heavy airstrikes targeting civilian homes, possibly including high-rise buildings." To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Hello and welcome to DW's coverage of developments in Gaza on Wednesday, August 13, 2025. Our coverage begins with an Israeli military chief approving a controversial plan for an expanded ground offensive in the Gaza Strip as Hamas negotiators traveled to Egypt for talks about ending the war and returning hostages still held by the terror outfit. The day also brings more reports of Palestinian civilians killed by Israeli gunfire as they attempted to get food for their families.
