Brent oil prices increased by nearly 4%, as the risk of supply disruption increased due to the Middle East war.
On the afternoon of July 23, Brent oil price increased by 3.8% to 97.7 USD per barrel. This is the highest level since the beginning of June. US crude oil WTI also increased by 3% to 89.4 USD.
World oil prices have gone up for the 5th consecutive session, due to concerns about supply when Houthi forces attacked ships in the Red Sea and the US and Iran continued to attack each other, causing the Strait of Hormuz to almost close.
Priyanka Sachdeva – senior market analyst at Phillip Nova said that oil prices are facing a rare risk, when transportation activities are simultaneously interrupted in both the Bab el-Mandeb Strait and the Strait of Hormuz.
“Geopolitical risks are back, but for oil prices to maintain their upward momentum, the market needs evidence of prolonged transportation disruptions or a significant decrease in supply,” Sachdeva assessed.
Saul Kavonic, head of energy research at MST Marquee, said the new threat to shipping routes through the Red Sea could disrupt the supply of up to 5 million barrels of oil per day.
Tensions in the Middle East have flared up again in recent weeks. The US has so far launched air strikes against Iran for 12 consecutive nights. Iran also responded by attacking US military positions in the area.
On social network Houthi said that these two ships violated this force’s “maritime blockade” in the Red Sea.
Brent oil price movements over the past year. Graph: Trading Economics
The Houthis control the strategic Bab el-Mandeb strait connecting the Arabian Sea and the Red Sea. This is the strait that many cargo ships and oil tankers have passed through since Hormuz was blockaded due to the Iranian war.
Meanwhile, Iran’s Islamic Revolutionary Guard Corps said an oil tanker caught fire after trying to follow a maritime route that the force said was mined south of the Strait of Hormuz. Two other tankers turned around upon arriving here.