Brent Extends Gains on Supply Disruption Fears

Brent crude rose above $99 a barrel on Wednesday, reaching a near seven-week high and edging closer to the key $100 mark after the US struck several Iranian tankers near Kharg Island, a major crude export hub. The attacks heightened geopolitical tensions and raised concerns about further disruptions to global oil supplies. A US official said the strikes came in response to an attempted missile attack on a US warship. Tehran retaliated by launching ballistic missiles toward Jordan and warning vessels in the Persian Gulf, urging tanker crews near Kuwaiti and Bahraini ports to “immediately abandon their vessels.” Iran-backed Houthi militants also attacked energy infrastructure in southern Saudi Arabia, including the 400,000-barrel-a-day Jazan refinery. Meanwhile, stronger Chinese oil demand is pushing up prices for African, Canadian and Latin American crude as disruptions in the Strait of Hormuz force refiners to look farther afield for alternative supplies.

Brent crude settled around $98 and kept climbing after reports claimed explosions had been heard in an area of Kharg. The US military has struck targets near Kharg Island and the port city of Jask. The targets included Iranian oil tankers. Iran’s key oil export hub, the island is the loading point for around 90% of the country’s crude shipments. Saudi Aramco facilities were hit in fresh attacks on Monday, while Iran-backed Houthi militants claimed responsibility for targeting the 400,000-barrel-a-day Jazan refinery and other facilities serving the domestic market. The US military struck three Iranian oil tankers on Saturday after Iran launched ballistic missiles at two Navy warships. Adding to bullish pressures, Iran said Monday it would establish a new shipping corridor with Oman in the Strait of Hormuz. Vessels would be required to coordinate with Tehran to enter a new restricted maritime zone around the waterway.

Brent topped $99 a barrel on Tuesday before paring gains to around $97.6 amid growing concerns over supply disruptions. The US and Iran exchanged strikes over the weekend, escalating tensions in the Middle East. Saudi Aramco facilities were hit in fresh attacks on Monday, while Iran-backed Houthi militants claimed responsibility for targeting the 400,000-barrel-a-day Jazan refinery and other facilities serving the domestic market. The US military struck three Iranian oil tankers on Saturday after Iran launched ballistic missiles at two Navy warships. Adding to bullish sentiment, Iran said Monday it would establish a new shipping corridor with Oman in the Strait of Hormuz, potentially making tanker traffic through the critical oil chokepoint even more challenging. Vessels would be required to coordinate with Tehran to enter a new restricted maritime zone around the waterway.