Oil prices soared to nearly $100 a barrel Tuesday (local time) after the US military fired missiles near Iran's oil export hub Kharg Island and an energy facility on Saudi Arabia's Red Sea coast came under attack.
That day, Brent crude futures for November delivery closed at $97.92 a barrel on the ICE Futures Europe exchange in London, up $0.92, or 0.95 percent, from the previous session. During the session, prices climbed as high as $99.46 a barrel, the highest level since July 24, when tensions between the US and Iran spiked.
West Texas Intermediate crude futures for October delivery closed at $93.03 a barrel on the New York Mercantile Exchange, up $1.55, or 1.69 percent, from the previous session.
Oil prices climbed sharply as armed clashes between the US and Iran continued over the weekend and through the Labor Day holiday in the US.
On Saturday, Iran's Islamic Revolutionary Guard Corps fired ballistic missiles at two US Navy warships patrolling the waters, prompting the US military to strike three Iranian oil tankers in response. The Revolutionary Guard said it then struck three tankers and vessels linked to the US, claiming they had used unauthorized shipping routes. It also said it fired ballistic missiles at a US aircraft carrier and a destroyer. That same day, the US military also fired a missile at a small Iranian oil tanker in waters near Kharg Island, a key hub for Iran's oil exports.
Concerns over the situation in the Middle East deepened further after reports emerged that Yemen's Iran-aligned Houthi rebels launched a massive retaliatory strike Tuesday. The strike targeted facilities belonging to Saudi Arabia's state oil company Aramco, as well as an air base. Oil supply through the Strait of Hormuz was already in effect cut off. The closure of the Red Sea route as well has stoked fears that the global supply chain could face an even deeper crisis.
"Oil market participants are now pricing in the possibility that disruptions to maritime transport will drag on for longer," said Hamad Hussain, senior economist at Capital Economics.
kate01@heraldcorp.com
