Oil Rebounds to $92 From a Two-Month Low as Iran Says Another Tanker Hit a Mine in Hormuz
Brent crude rose $1.28 to $92.77 a barrel Wednesday morning, rebounding from a two-month low, as Iran said another oil tanker had struck a mine in the Strait of Hormuz, Reuters reported.
U.S. benchmark West Texas Intermediate crude gained 76 cents, or 0.9%, to $86.80 as of about 4:30 a.m. ET, according to Reuters, a day after both benchmarks hit two-month lows.
Iran’s army said on state television that “a violating oil tanker caught fire after striking a naval mine” in a prohibited area in the eastern part of the strait, Euronews reported. The claim has not been independently confirmed.
The United Kingdom Maritime Trade Operations agency said it received a report from military authorities of an incident involving a tanker in the strait, but the crew’s status, damage and environmental impact were unknown, Anadolu Agency reported.
Iran’s Revolutionary Guards said Tuesday that tankers caught fire after hitting mines on an “unauthorized route,” CNBC reported, putting the number at two, while Euronews reported the Guards cited three.
Separately, India’s shipping minister, Sarbananda Sonowal, said a Liberia-flagged tanker carrying Indian seafarers was hit by a projectile in the Gulf, injuring four crew members, Euronews reported. It was not clear whether that ship was among those the Guards named.
Thirty-seven ships were attacked in and around the strait in October, the most of any month since the war began, and 10 more so far in November, according to Washington Institute for Near East Policy data cited by CNBC.
Peace Hopes Meet Shipping Risk
Prices had fallen more than $3 a barrel Tuesday after U.S. officials played down the need for further military strikes on Iran, then recovered some ground after an Iranian security official said no talks were taking place, CNBC reported.
Iran’s security chief also said Tehran would not allow “even a single particle” of enriched nuclear material to leave the country, Reuters reported. Washington wants nuclear issues in any initial talks to end the war.
“Oil prices are being supported by fading hopes of an imminent de-escalation,” UBS analyst Giovanni Staunovo told Reuters.
LSEG analysts warned that a deal alone may not reopen the waterway quickly.
“Even in the event a deal is struck, an increase in flows through the waterway would still depend on mine clearance, insurance costs and whether or not shipowners would even be willing to take the risk,” they wrote in a Nov. 10 note cited by CNBC.
The U.S. military, which escorts tankers through the strait, recently said all mines had been cleared, Euronews reported. U.S. Central Command said last month it had helped Gulf countries export 1.5 billion barrels through Hormuz since summer.
The strait carried about 20% of global oil supply before the conflict, Federal Reserve Vice Chair for Supervision Michelle Bowman said in a speech Tuesday, adding that freight rates and insurance premiums have surged even as crude flows neared pre-war levels.
On the supply side, U.S. crude inventories rose by 9 million barrels in the week ended Nov. 6, market sources citing American Petroleum Institute data told Reuters. Official government inventory figures are due later this week.
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