Testing a key swing area gives crude oil shorts a risk reference
Crude oil futures test a key swing area, giving traders a level to define risk and short-term bias.
Iran's IRGC says a supertanker illegally traversing the Strait of Hormuz hit two naval mines and caught fire.
Iran's Islamic Revolutionary Guard Corps (IRGC) has reported that a supertanker was halted and caught fire in the Strait of Hormuz after striking two naval mines. The vessel was allegedly attempting an illegal passage through the southern route of the waterway.
The IRGC also stated that "all ships must comply with its rules for passage through the Strait of Hormuz".
Tensions between the US and Iran have been escalating since the weekend, and this incident is seen as part of a message.
"You can bet that with tensions keeping high, Iran will also continue to make a showing of further disrupting traffic along the Strait of Hormuz. Even if already near a standstill, attacks on the waterway will go a long way in sending a message to the US and the world that they are still in control."
Iran's most impactful response would be to demonstrate attacks on vessels in the strait. The reported tanker incident, described as a mine strike, appears to be such a demonstration.
The ongoing military exchanges between the two sides suggest that tensions will not ease soon, with the standoff now in its sixth month.
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