Brent oil tops $90 as US, Iran expand strikes in the Middle East
Brent oil prices rose two per cent to more than $90 per barrel on Monday, as escalating US-Iran hostilities in the Middle East restricted oil shipments through the Strait of Hormuz. Brent crude futures LCOc1 climbed $2.09, or 2.37pc, to $90.19 by 0241 GMT,...
Brent crude climbed above $90 a barrel on Monday as intensifying US-Iran hostilities in the Middle East raised concern over oil shipments through the Strait of Hormuz, a key route for global energy flows.
According to a monitored public feed, Brent futures rose $2.09, or 2.37%, to $90.19 by 0241 GMT, after touching their highest level since June 11. The benchmark extended gains from last week, when it advanced 15.9%, its strongest weekly rise since April.
US West Texas Intermediate also moved higher, with front-month futures at $84.20 a barrel, up $1.71, or 2.07%, reaching their highest since June 12. WTI gained 15.5% last week, marking its biggest weekly climb since early March.
The jump in prices came as the conflict widened over the weekend. The US carried out a ninth straight night of strikes against Iran, while US allies Kuwait and Bahrain reported additional Iranian attacks. Analysts cited by ING said Brent had broken above $90 amid “no let-up” in the escalation in the Gulf, warning that further unchecked conflict could broaden attacks across the region.
The Islamic Revolutionary Guard Corps said on Monday that two oil tankers had exploded and become immobilised after trying to move through what it described as an unsafe southern route via the Strait of Hormuz. It alleged the ships had been encouraged by the US military to use that passage. Reuters said it could not immediately verify the report.
In recent days, both sides have targeted shipping traffic. The US says it is enforcing a naval blockade on Iranian ports, while Iran says it is acting against vessels that violate its rules for navigating the strait. The waterway typically handles about one-fifth of global oil trade, making any disruption closely watched by energy markets.
The United Kingdom Maritime Trade Operations agency said early on Monday that a vessel was on fire northwest of Oman’s Kumzar. LSEG data showed that four vessels passed through the Strait of Hormuz on Sunday, down from eight the previous day. The data also indicated that at least three oil products tankers and one Very Large Crude Carrier had entered the strait since Friday to load oil.
Barclays analyst Amarpreet Singh said the coming days and weeks would offer a clearer view of how sustainable regional oil exports could be under what he described as renewed dual blockades. He added that oil markets may be underestimating the strain on inventories, which he said are already at their tightest level in five years.
Source: Dawn Business - https://www.dawn.com/news/2016987/brent-oil-tops-90-as-us-iran-expand-strikes-in-the-middle-east
