Oil prices bounced back on Thursday as new attacks on tankers near the Strait of Hormuz reminded traders how fragile supply remains, and the Kingdom put its main Red Sea export hub on alert.
Brent crude settled $3.67 higher at $98.29 a barrel, up 3.9%, and US crude rose 2.7% to $90.52, Reuters reported. That reversed Wednesday’s plunge of more than 8%, when both benchmarks hit their lowest settlements since August.
What changed
At least five vessels have reported incidents in the Gulf since Sunday, according to UK maritime security agency UKMTO. That is close to October’s pace, when 35 ships were hit, the most in any month of the war.
Iran’s Islamic Revolutionary Guard Corps said two oil tankers and a tugboat caught fire after trying to use what it called unauthorized routes through the strait. The incidents haven’t been independently confirmed.
The Saudi angle
Saudi Arabia issued alerts on Thursday warning of potential danger in Yanbu, its Red Sea oil export hub, as Yemen’s Iran-aligned Houthis kept up attacks on the Kingdom.
Yanbu is the outlet Aramco has leaned on to keep crude flowing to buyers while traffic through Hormuz stays disrupted, so any threat there goes straight to the Kingdom’s export volumes.
The bigger picture
Prices are being pulled two ways. Hopes of calmer US-Iran relations after the US midterms drove Wednesday’s slide, while each new attack pushes them back up. Even after Thursday’s rebound, Brent is on course for a double-digit weekly drop.
Why it matters: higher prices only help Saudi revenue if the barrels reach buyers. Freight, insurance and longer routes eat into the gain, and the budget deficit has already nearly used up its full-year forecast.
What to watch: further attacks, any movement in US-Iran talks, and whether Brent holds near $100.
