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Oil tops $95 a barrel as Hormuz and Bab el-Mandeb threats grow
Brent reached $95.24 on Wednesday before easing to $94.40 by midday, up more than 3% from the prior day.
Oil prices pushed above $95 a barrel as renewed Middle East tensions raised fears of further disruption to global crude flows, with renewed US-Iran aggression in the strait of Hormuz and Houthi threats affecting shipments through Bab el-Mandeb.
According to The Guardian Business, shipping slowed significantly through Hormuz after US-Iran attacks restarted, while Houthi threats targeted vessels carrying Saudi oil through Bab el-Mandeb. Brent crude had previously eased to as low as $71 at the start of July after peaking in April at $126, but it surged again to $95.24 on Wednesday before falling to $94.40 by lunchtime, up more than 3% versus the previous day.
The price move followed an 11th night of strikes on Iran, including aircraft hangars and drone storage sites, despite diplomatic efforts to salvage an interim ceasefire. The article also notes Donald Trump said strikes would intensify, and that the conflict has cost the US $37.5 billion so far.
Analysts cited by The Guardian Business said the sharp rise this month is the fastest increase since the US-Israeli attacks on Tehran disrupted Gulf exports via Hormuz in March. It also cites Goldman Sachs analysts warning oil prices could reach $120 a barrel by year end unless exports through Hormuz restart, while Fatih Birol of the IEA said markets have benefited from “cushioning factors” but there is no room for complacency.
Latest closeWTI crude $87.52 ▲3.1%|Brent $94.43 ▲3.8%