Brent tops $110 amid Middle East tensions
By the AFREEQUE newsroom, based on Mercado
Brent rose 1.22% to $110.13 a barrel amid fears over supplies from the Middle East. Tensions have escalated following attacks on ships and energy facilities, as well as statements by Iran’s Revolutionary Guards, Mercado reports.
Brent rose 1.22% to $110.13 a barrel on Wednesday 20 October, amid fears of disruptions to oil supplies in the Middle East, Mercado reports. US benchmark West Texas Intermediate (WTI) gained 1.11% to $98.92 a barrel.
The rise follows attacks on oil tankers near the Strait of Hormuz and on Saudi energy facilities. On Tuesday, Iran’s Revolutionary Guards said naval mines had prevented three tankers from passing through the strait, accusing the vessels of using unauthorised routes. In a statement published on their Sepah News website, they said two tankers had been set on fire and immobilised.
On Monday, Yemen’s Houthi rebels claimed attacks targeting Saudi Aramco facilities in Yanbu, the Shaybah oilfield and airports in Riyadh and Abha, Saudi Arabia.
Rising risks are also pushing up the cost of shipping oil. According to a Goldman Sachs report published on Tuesday, the global average cost of transporting crude has exceeded $20 a barrel, compared with $3 a year earlier, and remains about seven times higher than its level a year ago. The bank estimates that war-risk insurance premiums in the Strait of Hormuz account for about $7 of the $17 annual increase in the average cost per barrel. Ship-to-ship oil transfers outside the Persian Gulf contribute $4. Goldman Sachs warns that persistently high costs could widen price differences between crude grades and reduce refinery margins, as well as lead to other effects not specified in the report.
Summary produced with the help of artificial intelligence tools, under AFREEQUE’s editorial responsibility.
