Oil prices surged 5 percent on Thursday, pushing Brent above $105 a barrel following an escalation of hostilities in the Middle East and amid signs that a revival in shipping through the Strait of Hormuz is petering out. The international crude benchmark climbed sharply after tankers were hit by missiles in the Gulf and off the coast of Oman late on Wednesday, and Saudi Arabia said three people were killed in Houthi attacks on its airports this week. Oil prices had eased in the second half of September as shipping picked up through the strait, a vital channel connecting Middle Eastern oil producers with international markets.
But traffic has dipped again following an increase in hostilities this month, including a strike on a tanker off Qatar on Wednesday evening. Data from trade consultancy Kpler showed that average weekly flows through the Strait of Hormuz climbed as high as 15 million barrels a day in late September, nearly 90 percent of prewar levels. But these have since fallen back to about 11 million b/d.
Preliminary data showed just 4 million barrels transiting the strait on Tuesday. UK Maritime Trade Operations reported nine attacks on vessels near the strait in the first week of October, after 13 over the course of September. It said it was advised on Wednesday evening that a tanker had been struck by multiple projectiles off the coast of Qatar and that casualties had been reported.
Separate maritime security sources said Iran had fired missiles at a tanker off the coast of Oman on Wednesday night, the first such attack outside the strait for a month. Saudi Arabia said a man and two women were killed in separate attacks claimed by Iran-backed Houthis on two Saudi airports on Tuesday and Wednesday, with dozens of people injured. The jump in oil prices poured fuel on the global sell-off in government bonds, deepening the pressure on public finances in indebted economies.
Ten-year gilt yields jumped 0.07 percentage points to 5.52 percent, their highest since 2007. French 10-year bond yields climbed 0.09 percentage points to 4.96 percent. A hurricane in the Gulf of Mexico has forced some US producers to halt production, adding to the upward pressure on prices.
West Texas Intermediate, the US benchmark, rose 5 percent to $92.70 a barrel. Brent is trading about 45 percent above its price on the eve of the Iran war, while European diesel is up almost 100 percent.
Source: Financial Times Companies · Summarized by HeadlinesBriefing