Oil prices hit $100 for the first time since July

Share AdvertisementCrude oil prices crossed the $100-per-barrel threshold on Monday for the first time since July 23, as renewed US-Iran hostilities and growing risks to shipping through the Strait of Hormuz intensified concerns over global oil supplies. BusinessDay’s checks mid-Wednesday showed that Brent was trading at $100.6, West Texas Intermediate traded at $95.26. Meanwhile, Murban crude traded at $117.3. The latest rally came after the United States struck three Iranian oil tankers over the weekend, escalating an already tense confrontation and raising the prospect of further disruption to oil shipments across the Middle East. US Central Command (Centcom) said the strikes on M/T Downy, M/T Stark 1 and M/T Kylo were carried out after Iran’s Islamic Revolutionary Guard Corps (IRGC) targeted two US warships with ballistic missiles. Admiral Brad Cooper said the strikes were intended to impose a greater economic cost on Iran. “If you shoot at two of our ships, we will impose an even higher economic cost, taking out three of yours,” he said. The escalation has put the Strait of Hormuz, through which a significant share of global oil supplies normally passes, back at the centre of the market’s risk assessment. Read also: Oil’s $100 sprint raises fresh fears of petrol price surge Centcom said US forces had redirected 92 commercial vessels, disabled three and boarded two since its naval blockade of Iran resumed on July 14. Iran, meanwhile, continues to describe the Strait as completely closed to vessel traffic, raising the prospect of a prolonged disruption to regional energy flows. Mohammad Bagher Qalibaf, Iranian parliament speaker, warned that Tehran would respond more aggressively to further US attacks. “The era of proportionate responses is now over,” Qalibaf said, warning that future Iranian retaliation would be “faster, heavier and more painful”. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, separately said Iran would establish a new “exclusion zone” extending towards the Strait of Hormuz and into the Persian Gulf. “Any ship that enters this area with the intention of passing through the Strait of Hormuz and is identified will be placed on our sanctions list,” Rezaei said. The conflicting claims over shipping activity have added uncertainty to the market. Chris Wright, US energy secretary, said more than nine million barrels per day of oil were still being exported through waterways, with another four to five million barrels per day moving through pipelines. Iran’s military, however, maintains that the Strait remains closed and has said its objective is to prevent oil from leaving the region. Independent tanker tracking points to a more mixed picture. TankerTrackers.com estimates that oil flows averaged about 5.04 million bpd over the latest 28-day period, although the figure carries considerable uncertainty as more vessels have switched off their automatic identification system transponders. That uncertainty is itself contributing to the oil price premium, as traders struggle to establish the scale and duration of any disruption to physical supplies. Read also: Goldman Sachs warns oil could hit $120 as shipping risks escalate Against this backdrop, Goldman Sachs has warned that crude prices could climb to $120 per barrel if attacks on shipping in the Middle East broaden and intensify. “Events over the last few days do suggest that the risk of shipping disruptions broadening and intensifying is an important one,” Daan Struyven, co-head of global commodities research at Goldman Sachs, told Bloomberg TV on Monday. Goldman sees “meaningful upside to crude oil prices”, Struyven said, while pointing to potentially sharper pressures in natural gas and refined products. “In gas and fuels, the supply shocks are bigger than in the crude market,” he said. The warning comes as oil has already staged a sharp recovery from recent levels, with Brent climbing above $97 per barrel early Monday before cro ssing $100, while WTI moved above $92.Related News 17 firms pay shareholders N1.13trn in dividends in H1  Five years after N900m e-ticketing rollout, racketeering claims persist Dangote to list 10% of Ethiopian fertiliser business on Africa’s youngest stock exchangeAdvertisement ShareYou Might Also Like IEA speeds diesel releases as supply shortages persist Nigeria’s LPG marketers seek tighter safety rules, digital controls Nigeria’s energy future hinges on investment, execution, stakeholders say AdvertisementRead the full article at BusinessDay Nigeria