Oil set for fourth monthly gain as Hormuz tanker attack highlights supply risks
Oil prices rose on Friday and were set for a fourth monthly gain after explosive devices attached by a small boat struck a tanker in the Strait of Hormuz, the key sea outlet for Gulf crude and fuel supplies. Brent crude futures for December, which expire on Friday, advanced $1.20, or 1.04%, to $116.08 a barrel as of 0323 GMT, while the more-active January contract gained $1.39 to $112.19. US West Texas Intermediate crude futures climbed $1.37, or 1.34%, to $103.37.
For the month, Brent was on course to finish nearly 11% higher, while WTI was heading for a 14% jump, as the US-Israeli war on Iran entered its eighth month. The UKMTO said the tanker was hit by explosive devices attached by a small boat, and it was not immediately clear who was behind the attack.
"Continued kinetic action around the Strait of Hormuz amidst doubts of a viable diplomatic pathway are keeping oil prices elevated in expectation of an escalation of the conflict in coming weeks," said Saul Kavonic, head of energy research at MST Marquee. On Thursday, the Houthis said they had attacked several sites in Saudi Arabia, including its largest oil refinery, Ras Tanura, the Rabigh refinery and a production facility in Abqaiq owned by state company Saudi Aramco, while a Saudi-led coalition said it had intercepted a cruise missile launched by the Houthis towards the kingdom's western region.
US President Donald Trump said on Thursday that Vice President JD Vance had reached out to Iran to help the country get medical supplies, after US media reported Vance had written to Tehran's top security official to revive peace talks. Iran has received a letter from Vance but has not responded yet, the country's semi-official Tasnim news agency reported, adding that Tehran wants the US to meet its conditions and that "any position that contradicts this framework is unacceptable." ExxonMobil and Chevron have cancelled plans for their executives to travel to the United Arab Emirates' biggest oil show next week, two sources familiar with the developments told Token Times.
Ole Hansen, the head of commodity strategy at Saxo Bank, said at a media briefing in Singapore on Thursday that oil prices could become even more volatile in the next couple of weeks due to Israel's parliamentary election and the US midterm congressional vote. He said the heightened uncertainty made it difficult to forecast prices, but he expects crude to trade in a higher range of $70 to $90 a barrel, compared with the pre-war level of $60-$70, even after the conflict ends due to the risk of renewed hostilities and the need for inventory replenishment.
