New york: Oil prices have climbed to fresh six-week highs after new US strikes on Iran and renewed Israeli threats against Tehran heightened fears of disruptions to Middle East energy supplies.
According to TRTworld.com, Brent crude futures rose $1.66, or 1.7 percent, to $97.29 a barrel by 1200 GMT on Thursday, while US West Texas Intermediate crude gained $2.03, or 2.2 percent, to $93.04. Both benchmarks were on track for a fourth straight day of gains after reaching six-week highs earlier in the session.
The latest US strikes resulted in the deaths of 18 people and injuries to 108 others across Iran, as reported by Iran's health minister. The Iranian Red Crescent confirmed that four people were killed and 67 were wounded at a wedding ceremony near the Strait of Hormuz. Additionally, Iran's semi-official Tasnim news agency reported the deaths of three Iranian army pilots in the attacks. These strikes marked the most significant exchange of fire between Washington and Tehran since July, with the conflict now in its seventh month.
Israeli Defence Minister Israel Katz reiterated warnings that Israel would target Iran's military and civilian infrastructure, including energy facilities, if Tehran initiated attacks against Israel. Saxo Bank analyst Ole Hansen noted that Katz's comments contributed to the recent rise in oil prices.
Shipping data indicated that six commodity vessels transited the Strait of Hormuz on Wednesday, down from 11 the previous day and significantly below the 10-day average of about 13. This decline in transit highlights the growing tension in the region.
UBS energy analyst Giovanni Staunovo emphasized that the oil market remains tight, with global inventories continuing to decline and Middle East tensions providing additional support to prices. Iran has also expanded its list of ships considered non-compliant, subjecting them to fines, confiscation, or detention if they attempt to pass through the strait.
In contrast, Iraq increased its oil exports to approximately 2.34 million barrels per day in August, up from roughly 1.35 million bpd in July, according to two Iraqi energy officials. September exports are also expected to rise, spurred by heavy discounts and Iranian approvals for Iraqi tankers to navigate the Strait of Hormuz, attracting buyers.
In broader financial markets, traders have heightened their expectations that the Federal Reserve will raise interest rates this month.