Oil Explodes, Potential for Sharper Rises!
Oil prices rose sharply again on Tuesday (July 14th), hitting a four-week high. This increase occurred after the United States reimposed a naval blockade on Iran, while both countries escalated attacks around the Strait of Hormuz. This situation has increased market concerns about the smoothness of global energy supplies.
Brent crude rose US$1.50, or 1.8%, to US$84.80 per barrel at 03:30 GMT. Meanwhile, West Texas Intermediate (WTI) rose US$1.70, or 2.2%, to US$79.84 per barrel. Both contracts had previously risen more than US$2 per barrel before paring some of their gains.
This surge follows a major rally in the previous session, when Brent surged 9.6% and recorded its biggest daily gain since May 2020. Oil prices are now at their highest level since the United States and Iran signed a memorandum of understanding to end the war on June 17th.
Tensions escalated after the US military launched attacks on Iran for the third consecutive night. President Donald Trump also reimposed a blockade on Iranian shipping and proposed a 20% fee to maintain security in the Strait of Hormuz. The market assessed these measures as adding a new risk premium to oil prices.
The situation escalated after two United Arab Emirates tankers were reportedly hit by Iranian cruise missiles in the southern Strait of Hormuz, specifically in Omani waters. The incident killed one Indian crew member and injured eight others. Shipping data also showed the number of tankers passing through Hormuz fell to a two-month low, indicating that ship operators were beginning to exercise restraint due to the increasing security risks.
As a result of this impact on the market, investors' primary focus is now on the physical movement of tankers in the Strait of Hormuz. If oil traffic is seriously disrupted, oil prices could rise even higher. However, if supplies remain stable despite the ongoing conflict, some of the geopolitical premium could begin to fade. Furthermore, the Houthi attack on Saudi Arabia also adds new risks to oil flows from the Middle East. (asd)*
Source: Newsmaker.id
