Oil prices rose on Friday amid escalating attacks and the threat of a Red Sea closure
Increased attacks by the US and Iran, the breakdown of the ceasefire, and the risk of restrictions on oil flow through the Strait of Hormuz, as well as the probability of closure of the Red Sea export route, pushed oil prices higher.
Brent crude futures rose 70 cents, or about 0.83%, to $84.93 a barrel at 03:12 GMT, while WTI crude futures also rose 81 cents, or 1.03%, to $79.76 a barrel, recovering losses from the previous session.
Both benchmark contracts have risen about 12% this week; Brent is on track for its third weekly gain, and WTI for its second.
The potential for the Red Sea to become another major supply disruption point further complicates the global oil outlook. The dual-risk scenario reinforces the geopolitical risk premium in both benchmarks.
For the first time since a memorandum of understanding halted hostilities last month, the U.S. launched two major waves of airstrikes in a single day on Wednesday; most of the attacks targeted objectives near Iran’s southern coast. The fire continued on Thursday.
Meanwhile, Qatar reported intercepting an Iranian missile attack.
Oil security has reached critical levels. The market should be concerned if the situation doesn’t improve in the next few weeks.
The U.S. Central Command announced that American forces launched a new wave of attacks against Iran for the sixth consecutive night to further weaken Iran’s military capabilities.
Tehran responded with missile and drone strikes targeting U.S. military bases in neighboring countries, including a bombing of a newly expanded airbase in Jordan.
Adding to concerns about oil supply, the Iranian leadership warned its Houthi allies to be prepared to close the Red Sea oil route if the U.S. attacks Iranian energy infrastructure.
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