Oil Prices Rise as Hormuz Tanker Attack Fuels Supply Fears

By Adedapo Adesanya

Oil prices rose on Friday morning as an attack on ‌a tanker in the Strait of Hormuz highlighted the continuing supply risks from the US-Israel war on Iran, which has entered its eighth month.

Brent crude futures gained $1.20 or 1.04 per cent to trade at $116.08 a barrel, while US ​West Texas Intermediate (WTI) crude climbed $1.37 or 1.34 per cent to $103.37 per barrel.

A tanker in the Strait ⁠of Hormuz, the key sea outlet for Gulf crude and fuel supplies, was hit by explosive devices attached by ​a small boat, the United Kingdom Maritime Trade Operations (UKMTO) Centre said, but it was not immediately clear who was behind the attack.

Market analysts noted that continued kinetic action around the Strait ​of Hormuz amidst doubts of a viable diplomatic pathway is keeping oil prices elevated in expectation of an escalation of the conflict in coming weeks.

On Thursday, the Houthis said they had attacked several sites in Saudi ​Arabia, including its largest oil refinery, Ras Tanura, the Rabigh refinery and a production facility in Abqaiq owned by state company ​Saudi Aramco, while a Saudi-led coalition said it had intercepted a cruise missile launched by the Houthis towards the kingdom’s western region.

US President ‌Donald ⁠Trump said on Thursday that Vice President JD Vance had reached out to Iran to help the country get medical supplies, after it was reported that Mr Vance had written to Iran’s top security official to revive peace talks.

Reuters reported that Iran has received a letter from Vance, but it has not responded to it yet.

Amid the security concerns in the Middle East, ExxonMobil and Chevron have cancelled plans for their executives to travel to the United Arab Emirates’ biggest oil ​show next week.

Europe will release 42 million barrels of emergency oil stocks over the next three months, half of it diesel, as European governments try to bring down fuel prices before winter.

Europe’s emergency reserves can put diesel on the market immediately, but domestic refinery capacity remains insufficient to meet demand, leaving the continent dependent on imported fuel.

Oil prices could become ​even more ⁠volatile in the next couple of weeks due to Israel’s parliamentary election and the US midterm congressional vote.