Oil hits five-month high after US hits key Iranian nuclear sites
SINGAPORE, June 23 (Reuters) - Oil prices jumped on Monday to their highest since January as Washington's weekend move to join Israel in attacking Iran's nuclear facilities stoked supply worries.
Brent crude futures rose $1.88 or 2.44% at $78.89 a barrel as of 1122 GMT. U.S. West Texas Intermediate crude advanced $1.87 or 2.53% at $75.71.
Both contracts jumped by more than 3% earlier in the session to $81.40 and $78.40, respectively, five-month highs, before giving up some gains.
The rise in prices came after U.S. President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself.
Iran is OPEC's third-largest crude producer.
Market participants expect further price gains amid mounting fears that an Iranian retaliation may include a closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows.
Iran's Press TV reported that the Iranian parliament approved a measure to close the strait. Iran has in the past threatened to close the strait but has never followed through on the move.
"The risks of damage to oil infrastructure ... have multiplied," said Sparta Commodities senior analyst June Goh.
Although there are alternative pipeline routes out of the region, there will still be crude volumes that cannot be fully exported out if the Strait of Hormuz becomes inaccessible. Shippers will increasingly stay out of the region, she added.
Brent has risen 13% since the conflict began on June 13, while WTI has gained around 10%.
The current geopolitical risk premium is unlikely to last without tangible supply disruptions, analysts said.
Meanwhile, the unwinding of some of the long positions accumulated following a recent price rally could cap an upside to oil prices, Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a market commentary on Sunday.
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Write to letters@ Sir, Sir Keir Starmer has called on Iran to 'return to the negotiating table' after the US bombed its nuclear sites. But treating Iran as a legitimate negotiating partner while it refuses to recognise Israel's right to exist only reinforces Tehran's rejectionist stance. History provides a clear road map: recognition leads to peace. Of the 164 countries that now recognise Israel, none are engaged in active warfare with it. Egypt's recognition in 1979 ended decades of conflict. Jordan's recognition in 1994 transformed enemies into sometime partners. The Abraham Accords demonstrated that recognition can unlock prosperity and co-operation even without resolving every regional grievance. Regional issues need and deserve resolution but they cannot be resolved in an environment where a significant power actively works towards the destruction of Israel. Negotiations remain preferable to conflict, but Israel needs to be involved in these talks as a recognised sovereign state. Without recognition and meaningful bilateral negotiations between Israel and Iran, the present situation will continue as a zero-sum game, which Israel simply cannot afford to lose. Tony Morcowitz Brighton and Hove Sir, When Sir Keir Starmer announced the Chagos Islands giveaway, he said that surrendering sovereignty was necessary because the UK had to be seen to uphold international law. Now he has gone on to publish statements in support of the US bombing of Iran. He is publicly supporting a flagrant breach of international law forbidding unprovoked attacks on other nations and, indeed, is speaking in defiance of advice from his attorney-general warning that any attack on Iran could be illegal. The government asserted that the international-law principles embodied by the Chagos deal would earn Britain respect in the 'global south', but in light of the UK's support for Israeli-American actions against Iran, all that the rest of the world will now observe is that Britain's commitment to international law is equivocal and inconsistent. Robert Frazer Salford Sir, International events emphasise the paucity of the UK's air defences, in particular the capability to counter attacks by ballistic missiles. Should the situation deteriorate to the extent that we are threatened, this will be critical, with Britain's best anti-missile defence platforms being six Type 45 destroyers, one of which is deployed with HMS Queen Elizabeth. Other Type 45s may or may not be available, with a number in refit, but ship-based systems are insufficient to defend the entire nation. Recent announcements on defence, from the strategic defence review through to promises to raise spending by a few percentage points in future, will do nothing to repair our non-existent integrated air defence. The government needs to act now and procure anti-ballistic systems. Group Captain Michael Norris St Austell, Cornwall Sir, In the raid on RAF Brize Norton (news, Jun 21), one of the engines on the Voyager aircraft was so badly damaged by the red paint sprayed on it by Palestine Action activists that it is said that the tanker is out of action and a new engine will cost £25 million. Surely this is nonsense: our planes are so vulnerable than an enemy would only have to drop paint over them to make them useless in war time? Brian RJ Simpson Gosport, Hants Sir, My father, Michael Beetham, was station commander of RAF Khormaksar in Aden, Yemen, in the mid-1960s, during a period of heightened tensions. As a small boy, I watched as he set off in the evenings to drive around the perimeter fence in his Land Rover. Sometimes he took me with him. He would stop and talk to personnel and inspect fences. He went on to be the longest-serving Chief of the Air Staff since Lord Trenchard, founder of the RAF. I wonder who carries out such checks these days at bases like Brize Norton? Alex Beetham Woodditton, Cambs Sir, There are many reasons why the House of Lords may not survive in its present form. Hubris is certainly one. For unnamed peers to tell The Times that they will use 'black arts' to 'kill off' the assisted dying bill and employ 'every means possible' to prevent it becoming law is hubris of the highest order (news, Jun 21). The Lords can and should seek to improve the bill through its scrutiny. That is indeed its role. But to seek fundamentally to thwart the will of the elected Commons is not. It is not just the future of the bill that will be at stake in this regard. So too will the future of an unelected second chamber. Sir Leigh Lewis Watford Sir, In just three days the concept of laws being based on Judeo-Christian principles has been removed by the House of Commons. Aborting a full-term unborn child will no longer be a criminal offence and assisting someone to kill themselves was approved. MPs have replaced a morality based on respect for life by a culture of death. Neither these changes were in the Labour Party manifesto and the House of Lords should therefore not feel constrained in refusing to endorse them. Nicholas Bennett Minister of health for Wales, 1990-92; Bromley, Kent Sir, I am horrified by the moral ambiguity demonstrated by the government. After endless debate, the third reading of the assisted dying bill has narrowly been passed, a compassionate piece of legislation that will give terminally ill people more control over their lives. By contrast, after only two hours' debate the government has amended abortion regulations to allow women to have a termination at any stage of their pregnancy, without fear of prosecution. The 24-week limit for legal abortion was set to protect viable foetuses. This amendment sanctions the murder of babies capable of leading independent lives. I hope there is sufficient wisdom among the members of the House of Lords to persuade the Commons to rethink the unethical decision they have made. Frances MacDonald Stratford-upon-Avon Sir, The reports that HS2 may now cost £100 billion came in the same week that Nice concluded the known benefits of the new Alzheimer's drugs lecanemab and donanemab do not justify the expense of funding them through the public healthcare system (news, Jun 19; letter, Jun 21). Given that the government is likely to have to make stark choices in its next budget, the choice of either cutting 30 minutes off journey times between London to Birmingham or extending the meaningful lives of thousands of people each year could not be starker. If Rachel Reeves's repeated statements that her decisions reflect the choice of the people are true, then let's ask them directly which they'd rather have. Dr Barry Johnson Sheffield Sir, Settle to Carlisle is now seen as one of the world's greatest railway journeys. However, the line started out in difficulty and there are some interesting comparisons to be made with HS2. The estimate to build the line was £2 million, but the challenges of building a route through the Pennines resulted in the cost and time to completion doubling. The line opened to freight traffic 150 years ago (passengers a year later). The final cost was about £500 million in today's money, and it took five years to build. Admittedly it is only 72 miles long (compared with 120 miles for HS2) and the hundreds of boys employed were paid half a crown (12.5p) per day. The railway today is a magnificent reminder of the vision of the Midland Railway Company, which sponsored it, and the tenacity and ingenuity of those who overcame the challenges of a hostile environment to build it. I wonder if in 150 years HS2 will be as popular — assuming of course that it is completed. Dr Bryan Gray Hunsonby, Cumbria Sir, It is nothing short of insanity that elite rugby union players are about to embark on a tour to Australia with the British & Irish Lions after another very lengthy domestic season, when there is clear evidence showing a dose-response relationship between head impacts and neurodegenerative disease. The longer and more intensely one plays contact or collision sports, the higher the risk of brain damage. The Lions tour — a gruelling and commercially driven tournament — is being promoted as a pinnacle of achievement. Where is the duty of care to players? Where are the safeguards and transparent risk disclosures? Rugby cannot continue to ignore the realities of repeated brain trauma in pursuit of nostalgia and profit. It must start putting welfare above spectacle. Alix Popham Ret'd professional rugby union player; Welsh international, 33 caps; Newport Sir, You report that the late Queen did indeed carry cash, for betting on the races (news, Jun 21). As a young journalist at The Sun in the Eighties I was sent to report on the Derby. The press box was next to the royal box and we all saw Her Majesty dash down to the front to watch a winner triumph. I was designated to ask her: 'Ma'am, did you have a bet on the winning horse?' I leaned over from the box to be faced by the back of Prince Philip, who was chatting to the Queen. My first attempt was ignored and feeling embarrassed and slightly annoyed I tried again. Philip drifted off and so I repeated the question. 'Did I what?' she replied frostily. Red-faced and sweating I stumbled through it again, when she graced me with a beautiful smile and said: 'Oh no, my dear, I never bet!' The next year a barrier was erected between the two boxes so that she would not be approached again. Muriel Freeman (née Burden) South Shields Sir, Car horns don't need to be loud to be effective (letters, Jun 17-21). When I was living in Bath in the early 1970s I drove an MGB, which I had bought from a friend. He had fitted a trio of strident air horns, but I discovered that if I pressed the button very gently the horns would emit a gasping or panting sound. Being very immature at the time I occasionally made this happen while waiting as a pretty girl crossed the road. This sometimes produced an amused response, but not always. One of the recipients of this attention, a particularly pretty girl, subsequently recognised me when we met at a party and she ticked me off for my uncouth behaviour, which I never repeated. In October we will have been married for 50 years. Richard Le Masurier Milford-on-Sea, Hants Sir, My husband was lucky enough to get ten birthday cards from me last year (letters, 18, 19 & 21). After forgetting to buy one for him I simply added 'and Wendy' to the cards he had received from other people. Wendy Rayner Huddersfield Sir, Dominic Sandbrook's article on class and how to define a gentleman (comment, Jun 21) reminded me of an events notice I saw when stationed in the British Army of the Rhine with the King's Own Scottish Borderers in the mid-60s. Those invited to a Minden Day dance were: 'Officers and their Ladies, NCOs and their Wives, and Other Ranks and their Women-Folk.' Bill Wells Wisbech, Cambs Sir, I've always felt rather proud of the fact that the Yiddish word 'mensch' means much the same as 'gentleman' but without any class implications — or gender implications either; a woman can be a mensch too. Or not, as the case may be. Margaret Lesser Bowdon, Greater Manchester Sir, Mark Twain, as is so often the case, hit the nail on the head. A gentleman, he said, is someone who knows how to play the banjo and doesn't. Dr David Bogod Nottingham Write to letters@
