Brent crude oil rose by 63 cents to $106.32 per barrel in trading on Wednesday. This price increase occurred after two ships were targeted in the Strait of Hormuz.
Details of the Attacks in the Strait of Hormuz
Both oil benchmarks saw an increase of more than a dollar in the early hours of trading, but lost some of their gains. Iranian officials refrained from providing details about their new strategy, but according to one of these officials, Iran began using different aggressive tactics against ships that Tehran believes violate its restrictions about 10 days ago. These actions have led to an increase in attacks on vessels that appear to threaten Iranian interests.
Read more: Investment of Five Initial Nations in the Coastal GasLink Pipeline
Economic and Security Impacts
The UK Maritime Trade Operations announced on Tuesday that a container ship and an oil tanker were targeted by projectiles of unknown origin within the Strait of Hormuz. These developments have raised concerns in the oil market and negatively impacted global oil supply.
Priyanka Sachdeva, head of market analysis at Philip Nova, stated that Iranian officials' remarks about disrupting U.S. efforts to curb oil prices reflect the real objectives behind the so-called peace negotiations. She added that Iran is aware of its geographical significance and the implications of rising oil prices for the global economy and may use this leverage.
In another development, the Saudi Ministry of Energy announced that Ansar Allah attacked an office building belonging to the state oil company Aramco in Dhahran, causing damage to the building. In response to Saudi support for Yemen's government forces, this group has launched ballistic missiles and drones towards the country.
Hiroyuki Kyukawa, chief strategist at Nissan Securities, predicted that concerns about oil supply due to conflicts between Ansar Allah and Saudi Arabia would drive prices up. He also noted that an increase in Russian diesel exports is expected to ease market pressure and prevent severe price fluctuations in either direction.
Last month, despite disruptions in oil shipments due to the U.S. war against Iran, Saudi Arabia increased its oil production. This action led to a significant increase in OPEC+ oil production, consisting of OPEC members and their allies, including Russia.
In Russia, the government stated that it does not see a direct link between peace negotiations with Ukraine and Moscow's agreement to export diesel to the U.S. These remarks came after U.S. representatives told Ukrainian officials that the diesel export agreement was part of efforts to bring Russia back to negotiations aimed at reaching a peace agreement.
Read more: New Board of Directors Registered for Shazand Refinery and the Future of Reza Cheraghi Koutiani · Oil, the Resilient Industry: A Test of Resistance and Resilience
