Iran's Tanker Attacks in the Strait of Hormuz Push Oil Prices Up
Brent crude oil prices rose above $101 per barrel as Iran increased its tanker attacks in the Strait of Hormuz.
As Iran accelerated its attacks on tankers in the Strait of Hormuz, with nine attacks reported this month, market activity increased, and the price of a barrel of Brent crude rose by 0.8% to over $101.
Growing Wave of Attacks in the Strait of Hormuz
Iran has stepped up the frequency of attacks on tankers in the Strait of Hormuz at a time when oil shipments are approaching pre-war levels. United Kingdom Maritime Trade Operations announced that nine attacks have already been reported in Hormuz this month.
This figure corresponds to half of the total attacks reported in the Strait of Hormuz and the Persian Gulf throughout September. Last month's total had risen due to four attacks occurring in the final two days.
Uncertainty in Markets and Shipments
Maritime security officials and shipping company executives state that it is not yet clear whether the recent attacks mean shipments from Hormuz will decrease. The impact of escalating tensions on seaborne gas flows, which have risen slightly in recent weeks, also remains uncertain.
As investors evaluate the increased flows through the Strait and the resurgence of attacks, the price of Brent crude oil rose 0.8% in early Asian trading to over $101 per barrel.
Risk Management and the Fear Factor
Dimitris Maniatis, CEO of risk management company Marisks, stated that Iran is trying to exert more control over the Strait of Hormuz through fear and uncertainty. Maniatis expressed that Iran does not need to stop every vessel; it is sufficient for the industry to believe that any ship could be the next target.
Global and Political Reactions
To calm the market, G-7 countries announced plans last week to release millions of barrels of emergency stockpiles into the market, while US President Donald Trump is seeking ways to control domestic fuel prices ahead of the midterm elections.
According to sources familiar with the matter, the Trump administration does not want to get further involved in Saudi Arabia's campaign against the Houthis and is trying to deter Riyadh from triggering a new large-scale conflict in Yemen.