Oil prices climbed on Thursday amid investor caution surrounding Iran-Oman negotiations and their potential impact on resuming flows through the Strait of Hormuz. Additionally, concerns were fueled by reports of attacks on Saudi tankers in the Red Sea and Gulf of Aden, heightening supply tensions.
Brent crude futures increased by 48 cents, representing a 0.60 percent rise to reach $79.93 per barrel by 0755 GMT. Similarly, US West Texas Intermediate futures saw a 29-cent uptick, or 0.39 percent, settling at $75.51 per barrel.
Tim Waterer, KCM Trade’s chief market analyst, highlighted lingering apprehensions among traders due to the previous short-lived Memorandum of Understanding signed in June. This history contributes to the current anxiety surrounding the durability of any potential new agreement.
Regarding the Iran-Oman negotiations, an agreement on the geographic coordinates for a shipping route through the Strait of Hormuz has been reached. Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, mentioned that a joint announcement is pending, subject to no interference from third parties.
A proposed deal between Iran and Oman, aimed at easing the US-Iran conflict, would grant Tehran authority over vessels entering the Gulf through the Strait of Hormuz. This concession signifies a significant development in the ongoing geopolitical landscape.
Before the conflict escalated in late February, the Strait of Hormuz managed approximately one-fifth of the global daily oil and liquefied natural gas supplies, underscoring its critical role in global energy markets.
Waterer emphasized the necessity for sustained and verifiable increases in volumes to alleviate market concerns and diminish supply risks. Despite this, data revealed that crude oil and condensate exports from Gulf countries remained relatively stable in July, hovering around 40 percent below pre-war levels.
Iran issued a warning to Gulf states, indicating that any fresh US aggression on its territory would trigger retaliatory actions against vital energy infrastructure across the region. This strategic move aims to raise the stakes of military intervention by targeting Washington’s regional allies.
In a separate development, Yemen’s Iran-aligned Houthis claimed responsibility for launching missile attacks on two Saudi oil tankers, one in the Red Sea off Yanbu and another in the Gulf of Aden. Saudi Arabia did not confirm these incidents at the time of reporting.
Meanwhile, Saudi Arabia announced a reduction in the September Arab Light crude oil official selling price to Asia, setting it at $2 below the Oman/Dubai average compared to the previous month. This adjustment was detailed in a pricing document reviewed by Reuters.
In a distinct event, Ukrainian President Volodymyr Zelenskiy disclosed that the Ukrainian military targeted two oil refineries located deep within Russia, as communicated via Telegram on Thursday.
