NEW YORK/MADRID.— Oil prices rose sharply on Sunday when the market opened, while forces from the United States and Israel attacked Iran and it responded by attacking Israeli territory and US military installations in different parts of the Persian Gulf, which affected crude oil shipments from the region.
Brokers were betting that oil supplies from Iran and elsewhere in the Middle East would slow or stop altogether. Attacks across the region, including those targeting two vessels transiting the Strait of Hormuz — the narrow entrance to the Persian Gulf — have restricted countries’ ability to export oil to the rest of the world. Prolonged attacks would likely translate into higher crude and gasoline prices, according to energy experts.
West Texas Intermediate, the light, sweet crude produced in the United States, was selling for about $72 a barrel late Sunday, according to CME Group data, up about 8% from its trading price on Friday, which was about $67.
Brent crude, the international benchmark, was trading at about $79 a barrel on Sunday night, up about 8% from its trading price of $72.87 on Friday, according to FactSet.
Tehran had temporarily closed parts of the strait in mid-February for what it said was a military exercise. New disruptions in that shipping channel could lead to lower supply and higher crude oil prices.
Attacks across the region, including those targeting two vessels transiting the Strait of Hormuz, could restrict countries’ ability to export oil to the rest of the world. According to energy experts, that will likely translate into higher crude and gasoline prices.
Shipping companies in fear
The shipping companies Maersk and Mediterranean Shipping Company (MSC) announced yesterday the temporary suspension of circulation through the Strait of Hormuz, a strategic route for global maritime transport, given the increase in attacks in the region.
In a statement, Maersk, one of the largest container shipping companies in the world, explained that the decision will remain in place until further notice, which could cause delays, diversions or schedule adjustments in services that call at ports in the Persian Gulf.
In addition, the company has announced the reconfiguration of its traditional routes through Bab el Mandeb and the Suez Canal, prioritizing the safety of its crew. Specifically, all routes from India to the United States will be diverted to the Cape of Good Hope.— ap/efe
At a glance
Iranian export
Iran exports about 1.6 million barrels of oil a day, mostly to China, which could have to look elsewhere for supply if Iranian exports are disrupted, another factor that could drive up energy prices.
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