Brent North Sea oil price exceeds $100 on Mideast attacks

Oil prices hit their highest in nearly two months today, rising for a fifth day after Yemen’s Houthis said they struck two Saudi oil tankers, widening disruption to global oil shipping through both the Red Sea and the Strait of Hormuz.

Brent oil futures were up 8.4% percent at $101.93 (€89.59), rising above $100 for the first time since late May.

US benchmark West Texas Intermediate rose 7.6% to $93.44 (€82.13) a barrel, exceeding $90 a barrel for the first time since 11 June.

“The immediate outlook for crude oil remains supportive as markets price a worrying probability of supply interruptions in a second chokepoint,” said Pepperstone research strategist Ahmad Assiri.

Besides the renewed conflict over control of the Strait of Hormuz, Yemen’s Houthis have opened a new front by targeting vessels carrying Saudi oil in the Bab el-Mandeb strait after stating they would impose a naval blockade on shipments from Saudi Arabia.

Houthi militia attacked two Saudi Arabian oil tankers in a military operation, the group said today, with a Saudi news agency later confirming one of the two vessels was ablaze after an assault while sailing in the Red Sea.

Goldman Sachs said Brent might exceed $120 a barrel in the fourth quarter and average $100 next year if the Strait of Hormuz remains disrupted through 2027, with further upside if the Bab el-Mandeb strait and Suez Canal also suffer persistent disruption.

Iran’s Revolutionary Guards said an oil tanker caught fire after an explosion while attempting to follow a mined route in the southern area of the Strait of Hormuz near the coast of Oman and that two others had turned back.

The Guards said the strait was under their control and “completely closed” while US actions continued in the region, warning that no tanker would be allowed to enter or leave without coordination with Iran.

The US military said it had completed a 12th consecutive night of attacks on Iran, hours after US President Donald Trump vowed to destroy an Iranian bridge or power plant every time Iran shoots at a ship in the Strait of Hormuz.

Goldman expects oil prices to retain most of their recent gains during July and August as global inventories continue to decline, supported by lower Middle East production, seasonal summer travel demand and a sharp slowdown in releases of strategic petroleum reserves.

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