Two Energy Routes Threatened, Oil Holds Strong
Oil prices maintained their gains after the United States announced it had launched a new wave of attacks on Iranian military installations on Wednesday (July 15). These attacks were aimed at weakening Tehran's ability to attack commercial shipping in the Strait of Hormuz.
Previously, Washington reimposed a naval blockade on Iranian ports and launched attacks overnight. This move prompted a response from Iran's Revolutionary Guard Corps, which threatened to shut down other export routes that benefit the US and its allies.
Brent crude rose 18 cents, or 0.2%, to US$84.91 per barrel. Meanwhile, West Texas Intermediate (WTI) rose 26 cents, or 0.3%, to US$79.60 per barrel. On Tuesday, oil prices had closed up 2% to a one-month high.
Tensions have escalated again after the fragile US-Iran ceasefire began to unravel. The US military said it had struck dozens of military targets near the strategic Strait of Hormuz and the Iranian coast in attacks that lasted about seven hours.
In retaliation, Iran's Revolutionary Guard Corps claimed to have attacked US military targets in the region, including Bahrain, Kuwait, and Jordan. Analysts also believe Iran could use its allies, the Houthis in Yemen, to disrupt the Bab el-Mandeb waterway to the Red Sea, putting two major global energy routes at risk of simultaneous disruption.
Goldman Sachs estimates that Gulf exports briefly recovered above 80% of pre-war levels following the US-Iran memorandum of understanding in June. However, exports have fallen back below 50%, or around 11 million barrels per day, in the past week. As a result, oil prices remain high as long as Gulf export disruptions persist, with Brent expected to reach US$110 in the fourth quarter if supply recovery continues to be hampered. (arl)
Source: Newsmaker.id
