Brent Oil Tops $90 as Middle East Attacks Threaten Hormuz Flows
Brent crude jumped after the US and Iran escalated hostilities over the weekend, including the targeting of vessels attempting to transit the Strait of Hormuz and an attack on a key oil facility in Kuwait. The…
Brent crude jumped after the US and Iran escalated hostilities over the weekend, including the targeting of vessels attempting to transit the Strait of Hormuz and an attack on a key oil facility in Kuwait.
The global benchmark climbed more than 3% to trade around $91 a barrel, the highest since mid-June, while West Texas Intermediate was near $85. Tehran said the ceasefire between the US and Iran had effectively collapsed, raising the prospect of deeper disruptions to energy flows through the strait.
The Iranian Navy said Sunday that it had halted four unidentified vessels attempting to use an “unsafe route” through Hormuz after they disregarded warnings. Two “met with accidents and were stopped in their tracks,” while the others “abandoned the route and turned back,” the navy said.
The Iranian Navy said Sunday that it had halted four unidentified vessels attempting to use an “unsafe route” through Hormuz after they disregarded warnings.
A week of tit-for-tat attacks by both sides has expanded beyond strictly military targets to include bridges, utilities and port facilities, signaling little prospect of a return to the fragile truce. Kuwait Petroleum Corp. said Iran struck an oil facility on Saturday, causing significant damage.
Intensifying strikes over the weekend “all point to scope for the conflict to broaden in scope and length,” said Saul Kavonic, senior energy analyst at MST Marquee. “Direct targeting of oil infrastructure in the region, or any successful attempts by the Houthis to hinder the Red Sea route, would be needed to accelerate the price increases.”
The Iran-backed Houthi militants in Yemen has disrupted commercial shipping through the Red Sea chokepoint in periods of elevated tension in the Middle East. Last week, their chief threatened to attack Saudi oil facilities after firing ballsitc missiles and drones on the kingdom.
Kuwait bore the brunt of Iran’s retaliation, while Bahrain was also targeted. Israel said Sunday that it intercepted an Iranian drone near the Israel-Syria border. US forces struck Qeshm Island in the Persian Gulf, as well as southern cities including Shadegan, Sirik and Hajiabad, Iranian media reported.
The US has resumed blockading Hormuz while Iran’s attacks on ships around the waterway have jeopardized the “shuttle run” trade through which Persian Gulf producers ferried out cargoes. US Energy Secretary Chris Wright said the number of ships going through Hormuz is down, but larger tankers are now transiting. He made the remarks in an interview with ABC’s This Week.
