Month four of Hormuz blockade: Oil prices continue to soar after Iran attacks Kuwait, Bahrain

Oil prices jumped over 1% on Wednesday as tensions in the Middle East continued to intensify after Iran launched missiles towards Kuwait and Bahrain. At the same time, peace efforts between Tehran and Washington yielded no breakthrough and the Strait of Hormuz disruption continued for 96th day.Brent crude futures gained $1.05, or 1.09%, to reach $97.05 a barrel, while US West Texas Intermediate (WTI) crude advanced $1.01, or 1.08%, to $94.77.The gains came as Iran fired ballistic missiles towards Kuwait and Bahrain. According to the US military, the missiles failed to hit their intended targets. Washington said its forces later carried out strikes on Iran’s Qeshm Island in response to what it described as attempted attacks.Markets continued to monitor developments surrounding the conflict, with Iran reviewing a proposed agreement with the United States aimed at ending hostilities. Earlier on Tuesday, Iranian media reported that Tehran had not been in contact with Washington for several days, although US President Donald Trump said negotiations had continued without interruption.On the supply front, US crude inventories fell for a seventh consecutive week, according to market sources citing data from the American Petroleum Institute released on Tuesday. The sources stated that crude stockpiles declined by 6.8 million barrels during the week ended May 29. Amid the escalating tensions, Iran claimed it had targeted US military facilities in Kuwait in retaliation for what it called American aggression in the Persian Gulf.“Following the hostile actions of the US in the Persian Gulf, the Strait of Hormuz, and Qeshm Island, American bases in Kuwait were hit,” Iran’s state-run broadcaster IRIB said.Kuwait, however, said its air defence systems intercepted incoming missiles and drones after explosions were heard in different parts of the country. The Kuwaiti Army’s General Staff said the sounds were linked to operations carried out by air defence units responding to hostile aerial threats.Meanwhile, US Central Command said Iran launched several ballistic missiles towards neighbouring countries but maintained that “all failed to hit their intended targets.”According to CENTCOM, two missiles fired towards Kuwait either fell short or broke apart mid-flight, while three missiles directed at Bahrain were intercepted by US and Bahraini air defence systems.Meanwhile, the conflict has now entered its fourth month, and the two sides are yet to reach a conclusion even after repeated peace efforts. The Middle East crisis began back on February 28, when the US and Israel launched joint strikes on Iran. After the attack, Tehran tightened its noose on the crucial Strait of Hormuz, the passage carrying 20% of the world’s energy supplies. Consequently, with the pipeline blocked, fuel shipments came under strain, pushing crude prices higher, from the $70 per barrel before the conflict began to beyond the $125 per barrel mark, sending ripples across economies. However, prices have soothed after signs of diplomatic efforts between the two sides, falling below the $100 per barrel mark.