Brent gains as more tankers face air assaults

The front-month ICE Brent contract has gained by $3.07/bbl on the day from Friday, to trade at $102.55/bbl at 09.00 GMT.

IMAGE: An oil pumpjack. Getty Images

Upward pressure:

Brent crude’s price has opened the week above the $100/bbl mark, as more crude oil tankers came under missile and drone attacks within the Strait of Hormuz over the weekend.

At least four separate commercial vessels were struck by unknown projectiles since Friday, while attempting to transit the region, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

One oil tanker was stuck within the Strait of Hormuz yesterday, causing a fire in the engine room. Another vessel, about 4 nautical miles east of Oman, sustained damages on the port side on Saturday, the UKMTO reported.

“There’s still little sign of an end to tensions,” two analysts from ING Bank said. “We have seen an increase in attacks on commercial vessels in the Persian Gulf recently,” the analysts added.

Downward pressure:

Brent’s price has felt some downward pressure following news of the release of another tranche of emergency oil stocks, amidst supply concerns following disruption to Saudi oil deliveries.

The Group of Seven (G7) countries, and their partners, have agreed to collectively release up to 100 million bbls of emergency crude oil stocks over the next four months. The release will be coordinated by the International Energy Agency (IEA).

“Oil prices are under pressure amid plans for additional coordinated releases from strategic reserves,” ING Bank’s analysts said.

The announcement came shortly after the Washington issued another Request for Proposal (RFP) for an exchange of up to 40 million bbls of crude oil from its Strategic Petroleum Reserves (SPR) last week.

The latest G7 action “reflects the growing tightness” in the global oil market, ING Bank’s analysts added. 

By Aparupa Mazumder

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