Oil surges past $95 as U.S. downplays Iran diplomacy and 2nd key trade route is disrupted

The price of oil surged nearly 5% Wednesday as U.S. officials talked down the chance of new peace talks after an 11th straight night of strikes on Iran and with major disruption now facing two of the world’s key supply routes.

International Brent crude oil rose as much as 4.9% to more than $95 per barrel for the first time in almost six weeks. U.S. crude oil rose as much as nearly 5.1% to nearly $89 per barrel.

Those prices pulled back slightly after stocks opened at 9:30 a.m. ET. Both benchmarks were still higher by more than 3%.

While Brent is widely considered the international oil benchmark, it also influences the retail cost of gas in the U.S.

Those pump prices rose again Wednesday, extending their climb above $4 per gallon. The national average price rose 4 cents overnight to $4.06 per gallon, according to motor club AAA data tracked by NBC News.

Treasury yields spiked, following oil’s latest jump and it’s likely impact on inflation. As of mid-morning trading, the U.S. 10-year Treasury yield was hovering around 4.65%, its highest since May.

As a result, the average rate on a 30-year mortgage rose to 6.75% Wednesday, matching its highest level of the year.

Since the start of the month, oil prices have gained 30% and are now up more than 55% since the start of the year. That move has largely erased the drop in prices that came after the U.S. and Iran signed a memorandum of understanding in mid-June.

President Donald Trump had declared that tentative deal, which was aimed at ending the war and reopening the Strait of Hormuz, “over” on July 8.

But on Wednesday, Trump ratcheted up the rhetoric once again.

“Any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran,” he posted on social media.

Overnight, Secretary of State Marco Rubio said that the U.S. remained open to diplomacy with Iran, “but right now they don’t seem to be serious about that.”

Rubio added that the U.S. would continue to try to protect commercial shipping.

But in the last two days, the U.K.’s Maritime Trade Organization has reported multiple attacks on vessels in the area. In at least two of those, the maritime monitoring group that is aligned with the British navy said that crews were forced to abandon ship.

Those attacks are one reason why traffic in the Strait of Hormuz remains extremely low.

On Monday, only 13 ships crossed the vital waterway and on Tuesday that number was only 9, according to an analysis of ship movements by MarineTraffic.

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