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Brent crude jumps back above $100 as Red Sea shipping risks escalate
Brent traded around $100.69 a barrel mid-morning Thursday, up more than 7%, with traders also lifting the entire Brent forward curve on fears of longer supply disruptions.
Brent crude has returned above $100 a barrel for the first time in nearly two months as escalating attacks on commercial shipping in the Red Sea raise concerns that the Middle East supply disruption is spreading beyond the Strait of Hormuz, OilPrice reports. As of mid-morning Thursday, front-month Brent for September delivery was trading around $100.69 a barrel, up more than 7% on the day after an intraday high near $101.01.
The move follows Houthi claims that the group struck two Saudi oil tankers in the Bab el-Mandeb Strait after declaring a naval blockade of Saudi exports earlier this week. The report says several vessels have reportedly altered course or delayed transits through the chokepoint, threatening an export route Saudi Arabia has used to bypass disruptions in the Strait of Hormuz.
OilPrice also notes that the broader rally reflects a shift from worries focused only on Hormuz, with traders increasingly pricing in the risk of prolonged supply problems. Brent has climbed roughly 20% in about two weeks as repeated attacks, renewed fighting involving Iran, and mounting export disruptions have eroded expectations for a quick return to normal oil flows.
The article adds that the rally is being reinforced by production and export disruptions elsewhere, including Kazakhstan beginning oil production cuts after drone attacks shut down tanker loadings at the Caspian Pipeline Consortium terminal on the Black Sea. WTI was also sharply higher, and the entire Brent forward curve moved higher as the market repriced duration risk.
Latest closeWTI crude $87.52 ▲3.1%|Brent $94.43 ▲3.8%