The price of Brent oil has reached $118 per barrel, and this increase is linked to concerns about renewed tensions between the United States and Iran. As the U.S. midterm elections approach, it is expected that oil prices will rise by 13 to 14 percent compared to last month.
Increased Tensions in the Strait of Hormuz
New tensions in the Strait of Hormuz, which is referred to as one of the most important oil transportation routes in the world, have raised concerns in the market. Reports indicate an increase in attacks in this area and explosions occurring at Iran's Jask port. Additionally, military movements in the region have significantly heightened concerns.
Read more: Increase in U.S. LNG Exports and Its Future Challenges
Financial Performance of Major Oil Companies
Major U.S. oil companies such as ExxonMobil and Chevron have reported strong financial performance in the third quarter of this year. ExxonMobil has managed to earn $15.4 billion, while Chevron has earned $9.9 billion. Notably, ExxonMobil has earned more from its downstream sector than from its upstream sector for the first time in six years.
Meanwhile, Iran has announced that three unidentified ships collided with mines due to using an unauthorized route in the Strait of Hormuz and caught fire. This claim has been denied by the U.S. Central Command (Centcom), which emphasizes that the main shipping route in this strait is safe.
Europe's Actions to Reduce Prices
European Union governments have decided to release 42 million barrels from strategic oil and petroleum product reserves to help reduce diesel prices. This action includes 10 million barrels of diesel oil, which will help lower pump prices in France by 0.12 to 0.18 euros per liter.
At the same time, Saudi Aramco has offered discounted crude oil to European buyers to increase their loadings through the Red Sea coasts, especially considering the risks posed by the Houthis.
ADNOC's Advances in Reducing Dependence on the Strait of Hormuz
Abu Dhabi National Oil Company (ADNOC) has announced the establishment of a pipeline with a capacity of 1.5 million barrels per day to Fujairah, which can reduce the country's dependence on the Strait of Hormuz. This pipeline is expected to be operational by early 2027, aiming to minimize crude oil traffic through this strait.
Ultimately, given these developments, the global oil market will face significant fluctuations in the coming weeks, and investors must be prepared for critical conditions.
Read more: Saudi Control Over a Fleet of 230 Tankers for Oil Exports from the Strait of Hormuz · Brent Crude Oil Price Rises to $112.76
