Brent crude rises on tanker attacks and supply concerns

The price of Brent crude oil has risen sharply at the start of the week, climbing $3.07 per barrel from Friday to reach $102.55 per barrel by 09:00 GMT. This increase comes amid escalating tensions in the Strait of Hormuz, where several crude oil tankers have faced missile and drone attacks over the weekend. The United Kingdom Maritime Trade Operations (UKMTO) agency reported that at least four commercial vessels were struck by unknown projectiles while navigating the region. One tanker was hit within the strait itself, causing a fire in its engine room, while another vessel suffered damage about 4 nautical miles east of Oman.

Analysts from ING Bank noted that there is no clear end in sight to the rising tensions. They highlighted a recent uptick in attacks on commercial vessels in the Persian Gulf, which is contributing to the upward pressure on oil prices. However, Brent crude has also faced some downward pressure due to the release of emergency oil stocks by the Group of Seven (G7) countries and their partners. The International Energy Agency (IEA) will coordinate the release of up to 100 million barrels of crude oil over the next four months to address supply concerns following disruptions to Saudi oil deliveries.

ING Bank’s analysts pointed out that the coordinated release of strategic reserves reflects the growing tightness in the global oil market. The announcement came shortly after the Washington issued another Request for Proposal (RFP) for an exchange of up to 40 million barrels of crude oil from its Strategic Petroleum Reserves (SPR) last week. Despite the efforts to ease supply constraints, the ongoing tensions in key shipping lanes continue to pose significant risks to oil market stability.