Economy
Brent Crude Surges to $107 Per Barrel as Shipping Risks Mount
By Adedapo Adesanya
On Thursday, Brent crude futures grew by $6.42 or 6.34% to $107.63 a barrel, while US West Texas Intermediate (WTI) crude futures soared by $6.43 or 6.69 per cent to $102.48 a barrel, as the biggest spike in attacks on shipping since the Iran war began fed worries about tighter supplies.
Iran-aligned Houthis seized control of Yemen’s port of Mocha yesterday, posing a further threat to Red Sea traffic, with Gulf traffic remaining restricted through the Strait of Hormuz as tanker attacks in the region have intensified in recent days.
Attacks from Yemen on Saudi energy facilities introduce a fresh source of market risk, expanding concerns beyond Iran and the Strait of Hormuz.
The capture of Mocha, which is closer to the Bab-el-Mandeb Strait, deals a significant blow to Saudi Arabia and the Yemeni forces it backs, and is a boost to Iran as it seeks to maintain pressure on global energy prices.
The Bab-el-Mandeb has become a vital route for Saudi oil exports since Iran throttled shipping through the Strait of Hormuz after the US and Israel launched their war against the Islamic Republic.
The threat is no longer confined to a single choke point, but now includes the potential for disruptions to ripple across regional export routes, oil production sites and other energy infrastructure.
US President Donald Trump warned the country may hit Iran’s Pickaxe Mountain, located near its heavily damaged Natanz uranium enrichment facility, and said the war would likely last beyond the November midterm elections.
Iran said it had attacked 10 ships near the strait on Wednesday, after the US hit five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps (IRGC) said it would escalate its response to any further attacks.
Meanwhile, China has stepped up purchases in recent weeks after months of subdued demand, boosting physical crude markets. Market analysts noted that if Chinese buying continues to recover, it could amplify the impact of any supply disruptions and drive prices higher.
US crude oil inventories fell by 391,000 barrels to 424.1 million barrels last week as refining activity continued to show strength, the Energy Information Administration (EIA) said.
The Organisation of the Petroleum Exporting Countries (OPEC) lowered its forecast on Thursday for world oil demand growth in 2026 to 380,000 barrels per day, a copy of its monthly report showed, marking the fifth straight downward revision.
OPEC oil output fell by 640,000 barrels per day in August as Saudi exports faced new disruptions due to the war in Iran and a US blockade cut Iran’s shipments.
