The opinions expressed here are those of the author, a columnist for Reuters.

By Ron Bousso

July 9 (Reuters) - Breaking down what matters today in global energy markets

By Ron Bousso, ROI Energy Columnist

Energy markets are heating up again.

The U.S.-Iran interim peace deal signed on June 17 brought cautious optimism that oil and gas flows through the Strait of Hormuz would recover quickly, but things took a big step back this week.

On Tuesday, Iran struck two tankers trying to cross the Strait of Hormuz through shipping lanes on the Omani side. This included a Qatari liquefied natural gas (LNG) carrier that was badly damaged. The attacks were Tehran’s latest effort to assert its control over vessel traffic through Hormuz in the wake of the war, something Washington and regional powers vehemently oppose.

This was not the first incident since the deal, but by far the most serious one. Within hours, the U.S. military struck dozens of targets across southern Iran, prompting Iran to retaliate across the region.

President Donald Trump, who was in Turkey for a NATO summit, dropped his own bomb when declaring the deal with Iran was "over", while raining invective on Iran’s leadership. The tit-for-tat attacks continued overnight, as shipping traffic through the strait practically ground to a halt.

Oil prices soared by over 5% in response on Wednesday towards $79 a barrel, though prices were slightly down on Thursday.

Is the Iran deal dead? Is the war coming back? Probably not.

But one thing is clear - the uncertainty over the deal and the stop-start flow of tankers through Hormuz are a nightmare scenario for Gulf nations desperate to return to normal after a bruising multi-month conflict. More on this in my latest column.

If the Mideast flare-up wasn't enough, another major event shook energy markets when Russia introduced a ban on diesel exports on Wednesday as part of its efforts to support the domestic fuel market. Systematic Ukrainian drone attacks on oil refineries have triggered gasoline shortages and ‌price spikes.

Russia is a major diesel exporter. Combine this news with the ongoing disruption in the Middle East, and the global diesel market now looks dangerously bereft of buffers. I wrote about this last week.

In other news:

• The latest heat wave across Europe saw roads buckling, runways melting and widespread transportation mayhem, highlighting the inability of the region's infrastructure to deal with the impact of climate change. This means that the next big winner in climate adaptation in Europe will likely not be solar or wind, but asphalt, wrote ROI Energy Columnist Gavin Maguire.

• One clever way to deal with the unprecedented and disruptive U.S. presidency of Donald Trump is to make up acronyms using Mexican foods. We’ve all heard of TACO, but ROI Asia Commodities Columnist Clyde Russell wrote that perhaps the best acronym for Trump is TAMALES.

As ever, don't hesitate to contact me at ron.bousso@thomsonreuters.com or follow me on LinkedIn with any questions or thoughts.

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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