Crude oil prices moved higher earlier today, after Iranian officials told Reuters the country’s forces were planning to further intensify strikes on tankers in the Strait of Hormuz, deploying new tactics.
Brent crude was trading at $106.37 per barrel, and West Texas Intermediate was trading at $94.72 per barrel, with the news that Israel’s Benjamin Netanyahu had asked Trump to start bombing Iran again likely to also contribute to the price rise.
Israeli media reported earlier today that Netanyahu had last week urged Trump to restart the strikes before the midterm elections in November, with unnamed sources being quoted as saying that Trump had told the Israeli prime minister to “go ahead and prepare,” without making a firm commitment for the resumption of the hostilities. Netanyahu denied those reports.
The Iranian officials who spoke to Reuters, meanwhile, attributed the recent surge in tanker attacks in the Strait of Hormuz to their new tactics, suggesting these are not about to end anytime soon. Iran had earlier warned the United States that it was ready to respond pre-emptively to any perceived threat of renewed strikes on its territory.
“The fact that Iranian officials are openly admitting to undermining US efforts to keep oil prices under control speaks volumes about the real intentions behind the so-called ‘peace talks,’” Phillip Nova analyst Priyanka Sachdeva said, as quoted by Reuters.
“Iran is well aware of its geographical importance and the havoc higher oil prices can inflict on the global economy, and it may not shy away from using this leverage,” Sachdeva added.
ING commodity analysts, meanwhile, noted the Saudi energy minister’s announcement of plans to ramp up the capacity of the East-West pipeline as a piece of bearish news, with 1.2 million bpd that can be added in a matter of months. The problem, however, remains what happens to those barrels once they are loaded on tankers.
By Irina Slav for Oilprice.com
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