Key Takeaways
- Brent crude futures rise by $3.09 to $82.54 a barrel.
- Iranian parliament committee reviews bill banning US and Israeli vessels from Strait of Hormuz.
- Houthi attacks on Saudi oil tankers raise concerns about regional energy supply.
Oil prices surged by more than $3 a barrel on Thursday, driven by heightened tensions in the Strait of Hormuz. Brent crude futures climbed to $82.54 a barrel, while US West Texas Intermediate futures rose to $77.71.
The rise in oil prices was attributed to an Iranian parliament committee's review of a bill that would ban US and Israeli vessels from the Strait of Hormuz and impose fines on violators up to 20% of cargo value, according to Fars news agency.
Dennis Kissler, senior vice president of trading at BOK Financial, stated, 'Crude traders remain focused on the US-Iran agreements, and the longer the delays, the more prices will fade back to the upside.'
Meanwhile, Yemen’s Houthis claimed they carried out missile and drone attacks on Saudi deployments in Marib and Hadramout, killing or wounding hundreds of Saudi-aligned fighters. The attacks also reportedly destroyed military camps, weapons depots, and vehicles.
John Kilduff, partner at Again Capital, commented, 'The market is going up and down as tensions rise and fall and of course these attacks are a significant development because it is more activity in the other theatre, away from the Persian Gulf, and is a reminder that the Red Sea passageway could still be in jeopardy.'
Gulf countries' crude oil and condensate exports remained largely steady in July but were about 40% below pre-war levels, according to shipping data.
Iran has warned Gulf states that any new US attack on its territory would trigger retaliation against critical energy infrastructure across the region. This warning was conveyed by five unnamed sources as Tehran seeks to raise the cost of military action by threatening Washington’s closest regional allies.
The Iran-aligned Houthis have launched missile attacks on Saudi oil tankers, including one off the coast of Yanbu and another in the Gulf of Aden. However, there has been no confirmation from Saudi Arabia regarding these incidents.
Roberto Cominotto, equity research analyst at Julius Baer, noted, 'Houthi attacks so far have not significantly disrupted oil and gas supply but this might change if attacks escalate further.'
Crude traders remain focused on the US-Iran agreements, and the longer the delays, the more prices will fade back to the upside.
Dennis Kissler, Senior vice president of trading at BOK Financial
The market is going up and down as tensions rise and fall and of course these attacks are a significant development because it is more activity in the other theatre, away from the Persian Gulf, and is a reminder that the Red Sea passageway could still be in jeopardy.
John Kilduff, Partner at Again Capital
Houthi attacks so far have not significantly disrupted oil and gas supply but this might change if attacks escalate further.
Roberto Cominotto, Equity research analyst at Julius Baer
