Prices for Brent crude oil surpassed $87 per barrel for the first time in a month following new attacks on ships in the Strait of Hormuz and the breakdown of the ceasefire between the United States and Iran. In just one day, the global benchmark rose by more than 5%, with other key oil market indicators also increasing.
The United Arab Emirates reported that two of its oil tankers carrying export oil through the southern route of the Strait of Hormuz were attacked. This marks one of the most serious assaults on shipping in the region in recent months. Meanwhile, the number of ships that can be tracked using open data has declined in recent days. The attacked tankers were operating with their transponders turned off, complicating the assessment of actual transportation volumes.
Escalation of tensions and risks for prices
The escalation followed a series of attacks on tankers last week, occurring shortly after the United States announced plans to resume the blockade of Iranian oil exports and potentially impose fees on ships passing through the Strait of Hormuz under the protection of American military forces. Additionally, the United States conducted a new series of strikes on Iran. Collectively, these events pushed oil prices up by nearly 14% in a week.
Despite the sharp price increase, the market remains supported by large volumes of oil exported through the Strait of Hormuz in recent weeks. However, reserves are low, and the current situation in the fuel market suggests a high risk of further price increases. “The deterioration of the diplomatic situation and the new escalation of hostilities caught the market by surprise,” said PVM analyst John Evans.
At the same time, other benchmark crude oil grades have also seen significant price increases. In particular, prices for Emirati Murban oil indicate a supply deficit, and premiums for petroleum products have risen as well.
Tensions in the region persist
According to Bloomberg, in recent days, Iran has been discreetly moving oil tankers through the Strait of Hormuz. Six supertankers, which are under U.S. sanctions, passed into the Gulf of Oman with their transponders turned off, further complicating the tracking of oil flows. Meanwhile, the Persian Gulf countries, after a temporary reduction in tensions, have increased their export volumes.
The UAE also reported to OPEC an increase in oil production to 3.8 million barrels per day in June after boosting exports and seeking alternative supply routes.
The conflict also shows signs of spreading beyond the Strait of Hormuz. According to the Alekhbariya TV channel, Saudi Arabia’s air defense intercepted ballistic missiles launched by Yemen’s Houthis at the southern regions of the country. Earlier, the Houthis claimed that a Saudi airstrike hit the international airport in Sanaa and vowed to respond.
Source: Bloomberg
