Iran’s Revolutionary Guards said they attacked two U.S. destroyers and what they described as a U.S. base in Jordan’s Al Azraq using ballistic missiles. The attacks were carried out in retaliation for U.S. strikes on Iranian oil tankers.
Crude oil price on September 9
Brent crude futures gained $1.57, or 1.6%, to $99.49 a barrel, while U.S. West Texas Intermediate crude rose $1.60, or 1.72%, to $94.63 a barrel. Brent has risen by a quarter since early August as hopes of a permanent resolution to the six-month-old war have weakened and fighting has intensified again.
U.S. Secretary of State Marco Rubio said Washington would continue targeting Iranian oil tankers in response to attempted attacks on U.S. warships. “Iran continues to try to hit U.S. naval ships, and for every time they do that or try to do that, they’re going to lose tankers,” Rubio told reporters during a visit to Colombia.
U.S. Central Command said on Tuesday that its forces had destroyed five Iranian crude oil carriers on September 8 following attempted missile attacks on a U.S. Navy warship over the previous two days.
Jordan’s air-defence systems intercepted 18 of the 20 ballistic missiles launched from Iranian territory, while the other two fell in unpopulated areas, according to the country’s state news agency, which cited the military. No casualties were reported.
Where are prices headed?
Goldman Sachs has warned that oil prices could reach as high as $120 a barrel if attacks on shipping in the Middle East intensify, with the renewed hostilities raising concerns about disruptions to crude supplies.Daan Struyven, co-head of global commodities research at Goldman Sachs, said in an interview with Bloomberg that recent developments indicated that the risk of wider and more severe shipping disruptions had become an important concern.
Struyven said Goldman Sachs sees “meaningful upside to crude oil prices”, while also suggesting that investors should bet on higher natural gas and refined product prices. He said the supply shocks in gas and fuels are larger than those in the crude market.
The duration of the disruption will be critical for the oil market. JPMorgan estimates that every additional month of disruption could add around $7 to $8 a barrel to Brent prices. If the disruption lasts three months, the bank expects average monthly Brent prices to reach around $114 a barrel.
Citi has raised its average Brent crude price forecast for the third quarter to $86 a barrel from $80, pointing to a longer-than-expected timeline for the reopening of the Strait of Hormuz.
ANZ analysts have also increased their short-term Brent forecast to $95 a barrel and warned that prices could rise further if the Middle East conflict escalates. They said a prolonged standoff involving calibrated military action by the U.S. and Iran appeared to be the most likely scenario, potentially delaying the return of full Middle East supply.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
