Shafaq News
Oil prices settled at their highest since June 11 onWednesday on mounting supply concerns as hostilities continued to escalatebetween the U.S. and Iran, while threats to shipping by the Iran-backed Houthimilitia in Yemen further boosted prices.
Brent crude futures settled up $3.06, or 3.36%, at $94.07 abarrel, their highest in just shy of six weeks, after hitting a session high of$95.47.
U.S. West Texas Intermediate crude climbed $2.49, or 2.95%,to $86.83.
The Brent crude three-month timespread, meanwhile, expandedto $9.26 a barrel, its widest since May 22, deepening backwardation onmounting supply risks. Backwardation is where prompt crude trades abovelater-dated barrels, typically signalling tighter near-term supply.
The U.S. military said it carried out an 11th consecutivenight of attacks on Iran. The U.S. attacks came a short while after the Kuwaitiarmy said its air defences were intercepting Iranian drones.
President Donald Trump said on Wednesday the U.S. would"bomb and destroy one bridge or power plant" any time Tehran targetsa ship in the Strait of Hormuz.
Iran's Revolutionary Guards' spokesperson warned shippingcompanies that the Strait of Hormuz southern route is mined in a post on X.
As well as the renewed conflict over control of that keywaterway, the Iran-aligned Houthis have opened a new front in the war bythreatening to target vessels carrying Saudi oil in the Bab el-Mandeb Straitand announced a naval blockade of Saudi Arabia.
Ships with links to Israel, the United States or SaudiArabia are at a higher risk of being attacked by Yemen's Iran-aligned Houthimilitia and are advised to avoid voyages through the Red Sea and Gulf of Aden,the European Union's naval force Aspides said on Wednesday.
"The energy market now has the dual-strait worry, withthe Bab el-Mandeb Strait looking like it could join the Strait of Hormuz as ahot spot, as traders closely watch shipping numbers in the RedSea," said Tim Waterer, chief market analyst at KCM Trade.
Bab el-Mandeb at the southern entrance to the Red Sea hasbecome an increasingly important route for Saudi Arabian crude exports astraffic through the Strait of Hormuz has fallen sharply again since a ceasefirebetween the United States and Iran collapsed earlier this month.
Five tankers in the Red Sea to avoid the Bab el-MandebStrait on Wednesday after the Houthis' threat to block Saudi oil exports.
"Heightened supply disruption fears are mountingas intensified conflict and security risks in the Red Sea force commercialvessels and tankers to alter trade routes," said Gelber & Associatesanalysts in a note.
In response to the Houthi warnings, Asian refiners areseeking to ship crude oil from Saudi Arabia's Red Sea port of Yanbu throughthe Suez Canal and around Africa.
"The (Houthi) threat has led tankers to divert which couldfurther pressure the physical market and Saudi exports, contributing to pushprices to the upside," said Frank Walbaum, market analyst at tradingplatform Naga.com.
Meanwhile, U.S. crude stocks rose last week, the EnergyInformation Administration said, as refinery runs eased and crude exportsdropped while imports rose.
Crude inventories rose by 2 million barrels to 411.7million barrels in the week ended July 17, theEIA said, compared with analysts' expectations in aReuters poll for a 1.1 million-barrel draw.
Elsewhere, EU ambassadors failed on Wednesday to agree on a21st package of sanctions against Russia over its invasion of Ukraine, an EUdiplomat said.
(Reuters)
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