Oil Extends Gains as Iran-Oman Hormuz Shipping Pact Raises Control Concerns
Summary
- Oil prices extended their rally on concern that Iran could strengthen its control over the Strait of Hormuz after Tehran and Oman discussed managing vessel traffic through the waterway.
- On September 7, WTI rose above $92 a barrel and Brent settled at $97, pushing gains since the war began to more than 30%.
- Even as clashes between the U.S. and Iran intensified, roughly 8 million barrels of oil a day continued to move through the Strait of Hormuz, while Saudi Aramco oil facilities came under another attack.
Forecast Trend Report by Period
Oil extended its rally as Iran and Oman discussed a plan to manage vessel traffic through the Strait of Hormuz, stoking concern that Tehran could tighten its grip on one of the world’s most critical crude shipping lanes.
Bloomberg reported on September 7 that West Texas Intermediate rose above $92 a barrel, while Brent settled at $97. Iran said an agreement with Oman was in the final stage and would include temporary safe shipping corridors for vessels transiting the strait.
If finalized, the deal could further expand Iran’s influence over shipping through the Strait of Hormuz. How the U.S. responds is also in focus after Washington attacked an Iranian oil tanker over the weekend. Iran has also warned that ships operating near Oman could be at risk of attack.
Renewed clashes between the U.S. and Iran have heightened fears of disruptions to Middle East oil supplies. International crude prices posted sharp gains last week, with the increase since the war began in late February exceeding 30%.
Still, crude shipments through the Strait of Hormuz have not been fully halted. U.S. Energy Secretary Chris Wright said last week that about 8 million barrels of oil a day were still being exported from the Persian Gulf. Some tankers were reportedly sailing with their Automatic Identification System, or AIS, turned off to avoid revealing their location.
Meanwhile, Aramco oil facilities in Jizan, a Saudi Arabian region bordering the Red Sea, came under another attack on September 7. No major damage was reported from the latest strike, but one of the area’s main refining facilities had already been shut down after an earlier wave of attacks.
