Oil prices rose on Friday, September 11, as markets watched developments in the Middle East and their impact on energy supplies. According to Reuters, Brent crude reached $109.97 a barrel during trading, the highest level in about four months, after a rise of more than 6% in the previous session. The price then retreated towards the $106-107 area, while Brent remained on course for a strong weekly increase. The increase in prices was accompanied by concerns about oil and gas supplies from the Middle East, due to restrictions on maritime traffic and tensions in the region.
Traffic in the Strait of Hormuz drops, "danger" in the Red Sea
Preliminary data from Kpler shows that on September 10, only seven ships passed through the Strait of Hormuz, compared with an average of 15 ships over the previous ten days. Before the war with Iran began on February 28, about 125 large commercial ships passed through the strait per day, including oil tankers and ships carrying liquefied natural gas. About 20% of the global daily supply of crude oil and LNG passed through Hormuz.
Markets are also watching developments in Yemen. Houthi forces, backed by Iran, have seized control of the port city of Mocha and advanced towards the Hanish Islands, near the Bab el-Mandeb Strait. Bab el-Mandeb connects the Red Sea with the Gulf of Aden and is part of the sea route that connects Asia with Europe via the Suez Canal. About 7% of the world's oil production passes through the strait.
RBC mentions the scenario of $121.99 per barrel
Helima Croft, head of global commodities strategy at RBC Capital Markets, said developments in the Bab el-Mandeb area are adding to the risks for shipping. According to an RBC Capital Markets scenario, a return to full-scale conflict between Saudi Arabia and the Houthis could push Brent to around $121.99 a barrel later in the year. Oil prices retreated from a high of $109.97 after reports that Middle Eastern foreign ministers were working on a temporary deal with Iran over shipping through the Strait of Hormuz./Monitor
