Oil approaches $100 amid new escalation around Iran
The price of Brent oil approached $100 per barrel after a new wave of hostilities in the Middle East. The US destroyed five Iranian oil tankers near the key export hub on Kharg Island and in the Gulf of Oman, and Tehran responded with new attacks and threats to vessels in the Persian Gulf.
This is reported by Bloomberg.
Brent is trading at around $99 per barrel—less than a dollar from the psychological level of $100. American WTI is near $94. The rise accelerated due to concerns that the new escalation could further complicate oil supplies through the Strait of Hormuz.
This route handles a significant portion of the world's seaborne oil shipments, so any deterioration in shipping security is quickly priced into the cost of crude oil by traders.
US destroyed five more Iranian tankers
US Central Command reported that on September 8, American forces destroyed five tankers linked to the Islamic Revolutionary Guard Corps after Iran twice attempted to attack a U.S. warship with ballistic missiles in two days.
Four vessels were struck in the Gulf of Oman, and another near Kharg Island, through which a significant part of Iranian oil exports passes. Before the strikes, the U.S. military ordered crews to abandon the vessels.
This is the second such operation in a few days. On September 5, the U.S. disabled three more Iranian oil tankers after attacks on American warships. Thus, in four days, American forces struck a total of eight vessels.
Iran threatened new attacks on shipping
In response, Tehran launched missiles toward Jordan and intensified threats to ships in the Persian Gulf. The Islamic Revolutionary Guard Corps called on tanker crews near the ports of Kuwait and Bahrain to abandon their vessels, stating that they could be targets.
Additional pressure on the oil market came from attacks by Iran-backed Houthis on Saudi Arabia's energy infrastructure. According to Bloomberg, the strikes forced a halt to operations at several facilities in the south of the country.
Market prepares for oil above $100
There are growing expectations in the market that the $100 mark might not be a short-term spike. MarketWatch cites an estimate by BNY strategists, according to which traders are beginning to prepare for Brent above $100 for a longer period if supply disruptions in the region intensify.
Expensive oil is already creating additional risks for global inflation. The day before, the rise in energy prices was one of the factors in the fall of the American stock market, as investors fear a new acceleration in consumer prices and the persistence of high interest rates.
The future direction of oil prices will largely depend on the situation around the Strait of Hormuz, tanker shipping security, and the scale of new strikes on the oil infrastructure of Iran and other countries in the region.
Sources: Bloomberg, U.S. Central Command, MarketWatch
