Libya Attacks and Hormuz Uncertainty Send Oil Prices Soaring
Oil prices increased on Wednesday due to mounting supply concerns in Libya and uncertainty over shipping through the Strait of Hormuz.
The attacks on energy infrastructure in western Libya continued, with a drone striking a power station in Zawiya early Wednesday, just hours after the National Oil Corporation (NOC) reported that the Zawiya Oil Refinery had been targeted for a fifth time since Sunday. The refinery operations resumed following the earlier strikes, but the repeated attacks have reinforced concerns over stability of Libya's energy infrastructure.
Libya produced around 1.35 million barrels of crude oil per day in July. The international benchmark Brent crude futures for October traded at $89.18 per barrel, up 0.3% from the previous close of $88.91. US benchmark West Texas Intermediate (WTI) futures for September traded at $83.57 per barrel, up 0.2% from $83.43 in the previous session.
The uncertainty over future shipping through the Strait of Hormuz has also added to concerns over oil flows. Iran's parliament is preparing legislation that would restrict military and commercial vessels from countries Tehran considers 'hostile' from entering the Gulf through the Strait without Iranian authorization.