Middle East Tensions Spark Crude Oil Supply Chaos
The escalating conflict in the Middle East has further exacerbated crude oil supply risks. Iran's attack on 10 ships near the Strait of Hormuz, combined with Washington striking five Iranian oil tankers, has taken the situation beyond just a single shipping lane issue. The Houthis' seizure of a Yemeni port on the Red Sea adds to the growing concerns.
Middle East production shut-ins have increased by 6.7 million barrels per day in August, while OPEC output fell by 640,000 barrels per day during the same month. This development comes as WTI crude oil broke above the critical $100 level.
Chinese refiners, who had been absent from the market for months, have started buying again. The combined effect of these events has made every aspect of the supply picture worse on the same session.