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WTI tops $94 as tanker attacks near Hormuz lift oil risk premium
WTI settled just above $94, up more than 2%, while war risk cover for a Hormuz transit has risen sharply from pre conflict levels.
West Texas Intermediate settled just above $94.00, rising more than 2% to its highest level since May 22, as fresh attacks involving US and Iranian forces kept investors focused on shipping risk near the Strait of Hormuz, according to FXStreet.
Iranian Revolutionary Guards said they fired on two American vessels and eight tankers near Hormuz, after US forces destroyed five Iranian tankers in the Gulf of Oman and off Kharg Island a day earlier. Britain’s maritime security agency reported multiple merchant ships disabled on both sides of the strait, including a vessel listing off Port Rashid and a gas carrier damaged at Khor Fakkan.
The US Central Command counted five vessels on Tuesday, four in the Gulf of Oman and one near Kharg Island, bringing the US tally to eight since Saturday, while the Revolutionary Guards put its own count at ten on Wednesday. Tehran also said it would expand its exclusion zone reaching the Arabian Sea off Chabahar and set out a retaliatory exchange rate for targets struck.
The conflict has pushed up costs for maritime insurance and altered freight economics, with additional war risk cover for a Hormuz transit previously indicated at 7.5% to 12.5% of hull value compared with roughly 0.25% before the conflict. FXStreet also noted that freight rates and tanker availability have tightened, while Middle East exports recovered from about 1.35 million barrels per day in July to about 2.35 million in August after some tankers were cleared to transit, though they remain below pre war levels.
Latest closeWTI crude $97.01 ▲4.3%