Brent crude touched $110 a barrel on Friday, its highest level in months, as Iran widened its campaign of attacks on shipping near the Strait of Hormuz and Houthi militants fired missiles towards Saudi Arabia.
Brent futures hit a session high of $110 before easing to settle at $109.86, a gain of 3.7 per cent on the day. US West Texas Intermediate rose 3.5 per cent to close at $101.41 a barrel. For the week, WTI added more than 10 per cent while Brent advanced nearly 5 per cent, according to CNBC’s market coverage.
Nine vessels attacked in a week
At least nine tankers and cargo ships have come under attack in the Strait of Hormuz since Sunday, as Iran seeks to choke off oil exports through the waterway that carries roughly a fifth of the world’s seaborne crude. US Central Command said Iran sank the container ship GFS Pride on Wednesday; the Singapore-registered vessel’s crew was safely evacuated, according to Singapore’s maritime authority.
The International Maritime Organization said the week’s attacks left three seafarers injured and two missing. Crude shipments through the strait have slipped to about 9.4 million barrels a day — roughly 70 per cent of the pre-war average, according to energy researcher Kpler — and tanker rates in the Gulf have hit record highs.
Pressure from three directions
Saudi Arabia’s military said it intercepted multiple missiles over the Red Sea on Friday, including one believed to be headed for the Yanbu oil export terminal, and destroyed three drones over Riyadh and the kingdom’s south. The Iran-backed Houthi campaign from Yemen has intensified this week, days after an attack on Riyadh’s airport killed 12 people.
Ukraine added to the pressure, vowing fresh long-range strikes on Russian refineries in retaliation for attacks on its own energy grid, even as Washington draws up new Iran strike plans. Traders said the combined threat to two major crude-producing regions was pushing risk premiums higher across energy markets — and analysts expect prices to stay elevated as long as shipping risk in the strait remains high.
