Oil prices hit their highest in more than a month on Thursday, rising for a fifth day after Yemen’s Houthis said they struck two Saudi oil tankers, widening disruption to global oil shipping through both the Red Sea and the Strait of Hormuz.
Brent crude futures were up by $4.57, or 4.86%, at $98.64 a barrel by 1203 GMT after touching their highest since June 3 at $99.09.
U.S. West Texas Intermediate crude climbed $3.87, or 4.46%, to $90.70 after hitting $91.19 for its highest since June 11.
“The immediate outlook for crude oil remains supportive as markets price a worrying probability of supply interruptions in a second chokepoint,” said Pepperstone research strategist Ahmad Assiri.
Besides the renewed conflict over control of the Strait of Hormuz, Yemen’s Houthis have opened a new front by targeting vessels carrying Saudi oil in the Bab el-Mandeb strait after stating they would impose a naval blockade on shipments from Saudi Arabia.
The Iranian-aligned Houthis said on Thursday that they had struck two Saudi oil tankers.
Two Chinese supertankers carrying a combined 4 million barrels of Saudi Arabian oil are exiting the Red Sea via the Bab el-Mandeb strait on Thursday, shipping data showed, even as a Saudi vessel came under attack in the region.
Goldman Sachs said Brent might exceed $120 a barrel in the fourth quarter and average $100 next year if the Strait of Hormuz remains disrupted through 2027, with further upside if the Bab el-Mandeb strait and Suez Canal also suffer persistent disruption.
Iran’s Revolutionary Guards said an oil tanker caught fire after an explosion while attempting to follow a mined route in the southern area of the Strait of Hormuz near the coast of Oman and that two others had turned back.
The Guards said the strait was under their control and “completely closed” while U.S. actions continued in the region, warning that no tanker would be allowed to enter or leave without coordination with Iran.
The U.S. military said it had completed a 12th consecutive night of attacks on Iran, hours after U.S. President Donald Trump vowed to destroy an Iranian bridge or power plant every time Iran shoots at a ship in the Strait of Hormuz.
Goldman expects oil prices to retain most of their recent gains through July and August as global inventories continue to decline, supported by lower Middle East production, seasonal summer travel demand and a sharp slowdown in releases of strategic petroleum reserves.
Meanwhile, European diesel margins hit a record $66.25 a barrel on July 17, supported by Russia’s diesel export ban following repeated Ukrainian attacks on its refineries and concerns over further disruptions to Middle East supplies, and traded as high as $65.30 a barrel on Thursday. (Reuters)
