WTI is up by over US$5/barrel since early yesterday and the futures curve is more decidedly in normal backwardation mode with chart 1 showing where it stands relative to early in the year and at various stages of the war.
Oil prices remain materially higher than when a war premium began to get factored in after early January. An estimated 63 million barrels of oil are stranded on the water according to Bloomberg and allegedly with no clear destination or buyer while finding buyers just got more difficult with the end of the waiver.
A Recap on last 12 hours or so
Iran struck three ships and is reportedly applying a mining strategy to steer ships closer to its coast along the Strait of Hormuz. Iran believes it has a right to control traffic through the Strait and charge for its use.
The US retaliated by revoking the waiver that permitted Iran to sell oil on global markets effective July 7th.
The US launched airstrikes against Iran late yesterday.
Iran’s Foreign Minister warned that the attacks were disproportionate, violate the MOU with the US and that Iran “will take decisive measures to protect its interests and national security.”
Trump then remarked this morning that the ceasefire with Iran may be over while not standing in the way of negotiators to continue their work. He said “For me, I think it’s over. As far as I’m concerned it’s just a waste of time. They can talk, but I think they’re wasting their time.” He went on to depict the Iranian regime as “scum,” “sick,” “vicious, violent people, and if they had a nuclear weapon, they’d use it.”