Oil gains after vessel attacks near Strait of Hormuz
FILE PHOTO: A flare burns off excess natural gas in the Permian Basin oil field near Odessa, Texas, U.S. February 18, 2025. REUTERS/Eli Hartman/File Photo
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July 7 : Oil prices rose on Tuesday as reports of attacks on vessels near the Strait of Hormuz revived fears of disruptions to shipping through the critical energy transit route.
Brent crude futures gained 89 cents, or 1.24 per cent, to $72.88 a barrel, while U.S. West Texas Intermediate crude rose 71 cents, or 1.04 per cent, to $69.26 a barrel at 0939 GMT.
“The overriding theme this morning is a ship being shot at in the Strait of Hormuz,” Saxo Bank analyst Ole Hansen said. “That’s bringing some geopolitical risk premium back into the price. It’s not a lot compared with what we’ve seen in the past, but it’s the main driver behind the bid in the market.”
“So if there’s any further escalation, then $75 would be the natural level to look at next ahead of $80.”
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A Saudi-flagged crude oil tanker was damaged near the Strait of Hormuz – close to the coast of Oman – after a Qatari liquefied natural gas tanker was struck in the same area, maritime security sources said on Tuesday.
A Qatari LNG tanker suffered significant damage after it was hit as it travelled through the Omani side of the strait, four sources with knowledge of the matter said on Tuesday, following reports that Iran’s Revolutionary Guards fired missiles at ships transiting through the waterway overnight.
Talks to reach a final deal between Tehran and Washington will not take place if U.S. threats continue, Iran’s foreign minister said on Tuesday, following U.S. President Donald Trump’s threat to “finish the job” unless a deal is done.
Investors are monitoring talks between the U.S. and Iran and their implications for shipping through the Strait of Hormuz, which prior to the beginning of the Iran war carried a fifth of the world’s daily supply of oil and LNG.
Japan will receive a boost in Middle East crude supply this month as two more stranded Japanese-owned supertankers carrying Saudi oil were exiting the Strait of Hormuz on Tuesday, shipping data showed.
Societe Generale said the oil market is expected to shift from a deficit into a surplus in late 2026 and through 2027 as supply growth outpaces slower demand growth.
The bank cut its oil price forecasts to $75 a barrel for the fourth quarter of 2026 from $83 previously and to an average of $73 a barrel in 2027 from $79, adding that inventories should gradually rebuild, although volatility is likely to remain high.
Saudi Arabia is considering expanding the capacity of its crude oil pipeline to the western Red Sea coast, five sources close to the matter said, which would enable the kingdom and possibly its neighbours to transport more oil without using the Strait of Hormuz.
Source: Reuters
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