Hormuz Tanker Attacks Send Oil Prices Soaring
Oil prices surged on Friday after Iran's Islamic Revolutionary Guard Corps attacked two tankers transiting the Strait of Hormuz under US military escort. The price jump followed a decline earlier in the week due to improving Hormuz throughput and de-escalation efforts between the US and Iran.
Brent closed July up 22% at $90.36, while WTI rose 20% to $85.41. The best month for oil since March saw significant gains for both benchmarks, with Brent trading as high as $93 on Wednesday before retreating to $89 earlier in the week.
The recent tanker attacks, however, pushed prices back up by 1.5% and 2.2%, respectively. This development comes as a reminder that Hormuz throughput remains a major concern for the global oil market. According to Commonwealth Bank of Australia estimates, traffic through the waterway has recovered to only 30-35% of pre-war levels.
The threshold for a rebound to oversupply conditions in the global oil market is around 50-60% of normal flows. The current price structure relies on Hormuz staying below this capacity, and the recent tanker attacks push directly against this recovery.