Oil prices jump as tanker attack threatens Strait of Hormuz shipments

Highlights

Brent rose 2.55%, WTI gained 2.32%.
Hormuz tanker attack raises supply risks.
Oil heads for fourth monthly gain.

January Brent futures advanced 2.55%, to $113.62 a barrel, while December West Texas Intermediate futures gained 2.32%, to $104.37, according to the latest market snapshots. The rally followed a tanker attack near the Strait of Hormuz and renewed threats to Saudi energy infrastructure, Reuters reports. Brent was on course for a monthly increase of approximately 13%, while WTI was heading for a 15% gain.

Tanker attack heightens concerns over Gulf oil shipments

A tanker traveling through the Strait of Hormuz was struck Friday by explosives attached to its hull from a small boat, according to the United Kingdom Maritime Trade Operations agency. The incident marked the first known successful attack involving limpet mines in the waterway since the US-Iran war began in February. The perpetrators had not been identified.

The incident raised concerns about shipping security along one of the world's most important oil transportation routes. Although Middle Eastern crude exports have recovered above prewar levels, repeated attacks on vessels threaten to disrupt deliveries and increase transportation costs.

Security risks extended beyond the strait. Yemen's Houthi movement said Thursday it had attacked several Saudi Arabian energy facilities, including the Ras Tanura and Rabigh refineries and an oil production installation in Abqaiq. A Saudi-led coalition separately reported intercepting a cruise missile targeting the kingdom's western region.

Diplomatic efforts struggle to ease market uncertainty

Qatari mediators returned to Tehran Friday as part of efforts to restart negotiations between Washington and Iran. The diplomatic activity followed reports that US Vice President JD Vance had contacted Iranian officials about humanitarian assistance and possible renewed talks.

However, significant disagreements remain over the conditions for an agreement. Investors are also watching the approaching US midterm elections and Israel's parliamentary vote, which could influence regional policy and military decisions.

The security situation has affected corporate activity. ExxonMobil and Chevron canceled plans for executives to attend a major energy industry conference in the United Arab Emirates next week.

Supply risks keep oil prices elevated

Oil prices continued to rise as attacks on tankers and energy facilities heightened concerns about the security of Middle Eastern supplies. Although crude exports from the region remain relatively strong, the threat of further military escalation and disruptions to shipping through the Strait of Hormuz is keeping traders cautious about the stability of global oil flows.

Saxo Bank expects crude prices to remain within a higher range of $70 to $90 a barrel after the conflict ends, compared with approximately $60 to $70 before the war. The outlook reflects the possibility of renewed hostilities and the need to rebuild depleted inventories.

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