Oil prices advanced on Tuesday after renewed security concerns in the Strait of Hormuz revived fears of supply disruptions, outweighing the bearish impact of increased OPEC+ production and Saudi Arabia’s latest crude price reductions.
By 04:41 ET (08:41 GMT), Brent crude futures climbed 1.1% to US$72.77 per barrel, while US West Texas Intermediate crude gained 1.1% to US$69.30 per barrel.
Renewed attacks keep geopolitical risks elevated
According to Axios, citing two US officials, Iran launched at least two missiles at commercial vessels passing through the Strait of Hormuz on Monday night, bringing an end to a week-long pause in attacks under an informal agreement with the United States.
The report said Washington is expected to consider retaliatory strikes against Iranian targets.
Separately, the UK Maritime Trade Operations agency reported that a tanker travelling near the Omani coast had been hit by an unidentified projectile, causing a fire. Although Tehran has not officially claimed responsibility, Iranian state media cited anonymous sources suggesting the target was a vessel transporting liquefied natural gas from Qatar.
Iran has also reiterated that all vessels using the Strait of Hormuz must follow routes authorised by Tehran, warning that any US intervention would be met with “a rapid and decisive action.”
Supply concerns continue to support crude
Oil prices have eased considerably since the temporary peace agreement reached in June, after surging above US$110 per barrel during the conflict earlier this year.
Although shipping activity through the Strait of Hormuz has gradually improved, traffic remains below normal levels. The strategic waterway continues to play a central role in negotiations involving Iran’s nuclear programme and wider regional security.
“Oil prices are back to pre-conflict levels, even though the Strait of Hormuz is still only seeing a fraction of traffic go through. There is still supply-chain stress here,” analysts at Deutsche Bank, led by Henry Allen, said in a note.
OPEC+ production increase caps gains
Further upside in crude prices was restrained by expectations of stronger global supply.
OPEC+ members agreed to increase production targets by 188,000 barrels per day from August after similar output increases in June and July.
The United Arab Emirates also reported crude production above 3.8 million barrels per day in June after leaving the OPEC+ quota system earlier this year.
Meanwhile, Saudi Aramco lowered the official selling price of its flagship Arab Light crude for Asian customers, marking the first discount against the regional benchmark since 2020 as Gulf producers compete for market share.
Leave a Reply