Tanker Attacks Lift Oil Prices
Oil prices rallied after attacks on several ships in the Strait of Hormuz again highlighted the risk of disruption to global energy traffic. Brent crude rose to near US$73 per barrel, while West Texas Intermediate (WTI) hovered around US$69 per barrel.
The price increase occurred after a tanker traveling south was reportedly hit about 8 nautical miles east of Limah, Oman, causing a fire. The vessel, identified as the Al Rekayyat, was carrying natural gas. Separately, Axios reported that Iran fired at least two missiles at commercial vessels passing through the Strait of Hormuz.
The Strait of Hormuz was previously nearly closed due to the conflict between the United States and Iran. The passage has now begun to gradually reopen, including to convoys of ships linked to Japan. However, shipping traffic has not yet fully recovered to pre-conflict levels.
Oil prices had previously fallen by around 30 percent in the second quarter after Washington and Tehran reached an interim peace deal. However, the latest attacks indicate that the normalization of energy markets remains fragile. Several analysts believe oil prices could receive short-term support, but gains are potentially limited due to weak physical market sentiment.
On the other hand, pressure on oil prices also comes from the prospect of increased supply. Saudi Aramco has cut its Arab Light price for Asian buyers, while OPEC+ has decided to increase production quotas next month. These conditions have led the market to believe that the oil rally driven by the Hormuz risk could still be restrained by concerns about a global oversupply. (asd)
Source: Newsmaker
