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Brent Crude Holds Above $100 as U.S.-Iran Tanker Attacks Roil Persian Gulf
Summary
Oil prices remained firm, with Brent crude trading above the key $100 per barrel mark, following the largest-scale attacks on shipping by Iran and the U.S. since their conflict began, stoking fears of prolonged supply disruptions.
Oil prices held steady on Thursday after international benchmark Brent crude breached the $100 per barrel threshold, as traders assessed the impact of escalating military conflict between the United States and Iran in a critical shipping lane.
By 0107 GMT, Brent crude futures for near-month delivery edged up 0.1% to $101.34 a barrel. U.S. benchmark West Texas Intermediate (WTI) crude saw a larger gain, rising 0.5% to $96.55 a barrel.
Tit-for-Tat Attacks Deepen Supply Fears
The price support comes after Iran announced on Wednesday that it had attacked 10 ships near the Strait of Hormuz. This action was reportedly in retaliation for the U.S. sinking five Iranian oil tankers. Iran’s Revolutionary Guard Corps has stated it will escalate its response to any further attacks, signaling a deepening of the six-month-old conflict.
These developments are fueling concerns about the security of oil transit through the Persian Gulf. "The tit-for-tat attacks suggest oil flows from the Persian Gulf are likely to remain disrupted for the foreseeable future," said ANZ analyst Daniel Hynes in a note to clients.
AdImpact on Global Oil Flows
The Strait of Hormuz is a vital chokepoint for global energy markets. Before the conflict, the waterway carried approximately one-fifth of the world's oil and gas supplies. According to reports, oil flow through the strait is already well below its pre-war levels.
"The broadening of the conflict threatens to risk even deeper disruption to oil supplies that had already left the oil market scrambling to adjust," Hynes added. Underscoring the tight supply situation, the U.S. Energy Information Administration on Wednesday revised its oil price forecasts for this year and next, citing the drop in global stockpiles caused by the loss of Middle Eastern supply.
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