Crude oil prices climbed the most since January after Iran shot down a U.S. military drone, further inflaming tensions over the mining of two oil tankers and sanctions imposed by President Trump.
West Texas Intermediate, a benchmark for prices in the United States, rose 4.3% to $56.29 a barrel in New York on Thursday morning after the U.S. military said the attack on the drone, traveling in international air space over the Strait of Hormuz, was unprovoked.
The $130 million surveillance plane was the Navy version of the RQ-4A Global Hawk High-Altitude Long Endurance Unmanned Aircraft, built by Northrup Grumman.
“Iranian reports that the aircraft was over Iran are false,” Navy Capt. Bill Urban, a spokesman for U.S. Central Command, said in a statement Thursday.
Washington has been at odds with Tehran since Trump took office, with the president pulling out of an agreement intended to keep the Islamic Republic from developing nuclear weapons and imposing sanctions on its exports instead.
The country has 155 billion barrels of proven crude oil reserves, about 13% of the total held by the Organization of Petroleum Exporting Countries, and a military action that curbed its shipments could force buyers to turn elsewhere, driving up demand and prices.
The Pentagon said Monday it would send 1,000 more troops to the Gulf region after explosions on tankers owned by Norwegian and Japanese firms in the Gulf of Oman, almost exactly one month after four other vessels were struck in the same waterway.
The U.S. has rejected criticism that it’s instigating a military conflict.
“President Trump does not want war, and we will continue to communicate that message while doing the things that are necessary to protect American interests in the region,” Secretary of State Mike Pompeo told reporters on June 13.
Crude oil prices today are still only a little more than half their 2014 high of $106.91 a barrel.
