Oil prices gained ground again today, having earlier retreated from recent highs reached earlier in the session, with traders weighing the risk of supply disruptions after overnight strikes by the US and Iran against signs that crude supplies continue to reach the market.
Brent crude futures rose $1.06 to $95.71 a barrel this evening and US West Texas Intermediate crude futures were up 70 cents, or 0.78%, at $90.92.
The two benchmarks earlier climbed to their highest since July 24 at $97.04 and $92.29 a barrel respectively.
Crude prices turned lower after comments from US Energy Secretary Chris Wright, who said that more than 17 million barrels of oil flowed through the Strait of Hormuz on Monday, said Saxo Bank analyst Ole Hansen.
“Adding to the more constructive tone, Chinese President Xi Jinping said China is willing to work with Middle Eastern countries to safeguard shipping through key regional waterways,” Hansen added.
The US and Iran were back on a war footing today after the most significant exchange of fire in weeks, with Washington threatening more devastating strikes.
The Islamic Revolutionary Guard Corps said the US attacks would further restrict traffic through the Strait of Hormuz, a critical waterway that carried about a fifth of the global oil and LNG consumed before the conflict and which Iran has effectively closed to commercial shipping.
Two oil tankers hit sea mines and were disabled while attempting to transit the Strait of Hormuz, Iran’s Revolutionary Guards said today in a statement shared by state media.
“Ship-to-ship transfers in recent weeks have meant that some oil has continued to be exported through the Strait of Hormuz, alleviating some of the pressure on the oil market. However, these flows are at high risk of being disrupted by military strikes,” said Hamad Hussain, senior climate and commodities economist at Capital Economics.
“If the conflict escalates further and there is even greater disruption to shipping in the Middle East, Brent crude prices could feasibly rise beyond $100,” Hussain added.
Elsewhere, Russia carried out a heavy missile and drone attack on energy infrastructure in Ukraine’s southern region of Odesa overnight, transmission system operator Ukrenergo said today.
