Oil jumps as Iran claims to seize British tanker

Bloomberg

Oil jumped in after-market trading following the Iranian Revolutionary Guard Corp seizing a British oil tanker and a Liberian-flagged ship in the Strait of Hormuz, raising stakes in the critical oil chokepoint.
Brent futures rose as much as 1.4 percent from its settlement, while WTI futures also edged higher after the seizure of the tankers. UK Foreign Secretary Jeremy Hunt said that he is “extremely concerned by the seizure of two naval vessels by Iranian authorities in the Strait of Hormuz.”
“With all the noise about potential negotiations with Iran, the reality is that geopolitical risk is enormously high in the heart of the oil producing gulf and key transport corridor,” said Joe McGonigle, an energy policy analyst for Hedgeye Risk Management and a former senior official at the US Energy Department. “Iran’s only response to maximum pressure by the US is maximum chaos in the region that tries to win concessions from the US. Iran’s seizure of the British tanker is just one example and we think the market should get prepared for more risk ahead.” Despite the escalating conflict in the Middle East, New York futures ended the week 7.6 percent lower, the biggest weekly loss in nearly two months, amid fears about waning demand.