Brent rises 8% on the week as Middle East security threats flare

Supply concerns due to the ongoing military assault in the Persian Gulf has pushed Brent crude up about 8.3% from Friday’s close to $100.34/bbl at the time of writing.

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Brent futures has swung between $87.80/bbl and $100.46/bbl this week, as the highly critical Strait of Hormuz continues to remain closed to vessel traffic.

Iranian forces have launched missile and drone attacks on commercial vessels in the Strait of Hormuz, disrupting one of the world’s most vital energy shipping routes.

Yesterday, Iran’s top security official Ali Larijani issued a warning to US President Donald Trump that Tehran will continue its military assault on regional energy infrastructure as the conflict with the US and Israel continues to escalate.

Meanwhile, US forces have struck more than 60 Iranian vessels since the beginning of the conflict on 28 February, the US Central Command (CENTCOM) official Brad Cooper said.

The strait handles about 25% of global seaborne oil trade daily. Keeping it closed for a prolonged period will only result in higher oil prices, according to market analysts.

Brent crude’s price rose by about $15/bbl, or roughly 17.6%, in the week ended Thursday, according to data from ICE Futures Europe.

“There is only one way to see oil prices trading lower on a more sustained basis, and that is by getting oil flowing through the Strait of Hormuz once again,” remarked ING Bank’s head of commodities strategy Daniel Hynes.  

By Aparupa Mazumder

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