Oil Prices Jump on Heightened Supply Risk, Brent Tops $114
Oil prices continued to rise Friday as tensions over vessel transits through the Strait of Hormuz and concerns about potential disruptions to Libyan oil production heightened global supply risks.
International benchmark Brent crude futures for December delivery rose 1.2% to $114.57 a barrel, up from $113.17 at the previous close. US benchmark West Texas Intermediate (WTI) crude futures for December delivery gained 1.4% to $100.89 a barrel, up from $99.47 at the previous close.
The naval forces of Iran’s Islamic Revolutionary Guard Corps (IRGC) warned that the conflict could spread to US military bases in the region if Washington continued to encourage vessels to transit the Strait of Hormuz through routes Tehran describes as “illegal.”
The IRGC said the routes in question were mined, arguing that encouraging ships to use them increased the risk of maritime accidents.
In an earlier statement, the IRGC said four vessels transferring oil cargoes between ships in the northern Persian Gulf had been hit, while three vessels caught fire after striking sea mines west of the Strait of Hormuz.
Growing concerns over the safety of oil tankers in the region, along with the possibility of escalating hostilities, have reinforced expectations of further disruptions to global oil shipments, supporting prices.
Meanwhile, an intervention targeting an oil pipeline in Libya has added to supply concerns.
A group of unauthorised individuals shut an isolation valve on a crude oil pipeline near Libya’s Zawiya refinery, the country’s National Oil Corporation (NOC) said in a statement released on Thursday.
According to the NOC, the individuals entered a crude oil reception station operated by the Arabian Gulf Oil Company (AGOCO) near the refinery and closed a valve on an 18-inch pipeline.
The pipeline transports crude oil from AGOCO’s Hamada and Tahara fields to the Zawiya refinery. The NOC said the valve was closed without prior coordination or approval from the relevant technical and operational authorities.
The corporation warned that a prolonged closure could force production shutdowns, disrupt operations and reduce national oil revenues.
US President Donald Trump has also accused Iran of seeking to drive up oil prices ahead of the Nov. 3 midterm elections, underscoring persistent tensions between Washington and Tehran.
Meanwhile, Trump on Thursday declared petroleum production, refining and related activities essential to national defense, a move that could unlock federal funding for fossil fuel projects.
In a presidential memorandum, Trump invoked Section 303 of the Cold War-era Defense Production Act, allowing the government to provide financial support for oil production, pipelines, storage and marine terminals. Oil Rises as Iran-Backed Houthis, Saudi Arabia Tensions Escalate
