Oil Rebounds From Two-Month Lows as Hormuz Tanker Attacks Blunt Iran Truce Hopes
Brent crude rose back above $92 a barrel on Wednesday after new attacks on tankers in the Strait of Hormuz, including a strike reported by British maritime authorities and two vessels Iran's Revolutionary Guards said hit mines.
Oil prices rose on Wednesday from two-month lows, as fresh attacks on tankers in the Strait of Hormuz worked against hopes that the United States and Iran were moving toward an end to the war.
Brent futures climbed 52 cents, or 0.6%, to $92.01 a barrel by 0730 GMT, while U.S. West Texas Intermediate rose 16 cents, or 0.2%, to $86.20, according to Reuters. The rebound came a day after prices fell by more than $3 a barrel when U.S. officials played down the need for further military strikes against Iran. Some of those losses were clawed back after an Iranian security official said no talks were taking place between the two sides.
Two more tankers hit
The United Kingdom Maritime Trade Operations agency said on Tuesday that a tanker was struck northeast of Lima in Oman. In a separate statement the same day, Iran’s Revolutionary Guards Navy said two tankers caught fire after hitting naval mines on what it called an unauthorized route through the strait. That account has not been independently confirmed.
The attacks continued a run of shipping incidents that has kept oil traders on edge even as diplomacy has been discussed. Data from the Washington Institute for Near East Policy showed 37 ships were attacked in the Strait of Hormuz and nearby waters in October, the highest monthly total since the war began, with 10 more attacks recorded so far in November.
“There has been an increase of vessel attacks in the Gulf shipping lanes amidst uncertainty of the diplomacy talks,” June Goh, a senior analyst at Sparta Commodities, told Reuters.
Shipping lanes stay risky
Analysts at LSEG wrote in a note on November 10 that even if a deal is struck, more oil moving through the waterway would still depend on mine clearance, insurance costs, and whether shipowners are willing to take the risk.
U.S. crude stocks rose by 9 million barrels in the week that ended November 6, according to data from the American Petroleum Institute cited by market sources. In Russia, a regional governor said a drone attack caused a fire in the port area of Ust-Luga on the Baltic Sea on Wednesday, injuring three workers. Industry sources also said Russian oil refining capacity has fallen by about 30% since late October after renewed Ukrainian drone attacks.
Reporting based on coverage by Reuters.
