Oil approaches $100 amid new escalation around Iran
The price of Brent crude oil during trading on September 9 exceeded $100 per barrel for the first time since the end of July. Growth accelerated due to a new escalation between the US and Iran, risks to supplies from the Middle East, and the resumption of active oil purchases by China.
Brent futures rose by more than 2% and traded around $100.1 per barrel in the morning. American WTI went up by approximately 1.8% to $94.7 per barrel. Since the beginning of August, Brent has added about 25%.
The morning rise continued a rally that intensified after a new round of the conflict between the US and Iran. The US military announced the destruction of five Iranian oil tankers in response to Iranian attempts to attack an American warship with ballistic missiles.
Attacks by Iran-backed Houthis on Saudi Arabia's energy infrastructure created additional pressure on the market. Some facilities were forced to temporarily suspend operations, which increased fears of further expansion of the conflict and oil supply disruptions.
China is increasing purchases again
Unlike previous stages of the conflict, this time the geopolitical factor coincided with a recovery in demand from China, the world's largest oil importer. It was weak Chinese purchases that previously restrained price growth even amid supply problems through the Strait of Hormuz.
In August, China imported 37.9 million tons of oil, which is 6.2% more than in July. Chinese refineries are more actively buying raw materials from Russia, Africa, Canada, and Latin America, trying to compensate for the reduction in available supplies from the Persian Gulf and Iran.
The situation remains particularly tense around the Strait of Hormuz. According to Rystad Energy estimates, about 8-9 million barrels of oil per day passed through it during the week before the new escalation on August 30. Recently, this figure has dropped below 2 million barrels per day.
Risks are spreading to the Red Sea as well, which became one of the alternative routes after the flow through the Strait of Hormuz decreased. New Houthi attacks on Saudi Arabia increase the threat to this route.
Against the background of the worsening situation, Goldman Sachs, Bank of America, and HSBC have raised their oil price forecasts in recent days. The market is increasingly pricing in the risk that supply disruptions from the region may prove to be prolonged.
Source: Bloomberg, Associated Press, The Wall Street Journal
