Brent crude oil futures were nearing $100 a barrel on Wednesday as reports of fresh strikes in West Asia raised apprehensions about potential supply disruptions.
At 9.43 am on Wednesday, November Brent oil futures were at $99.34, up by 1.45 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $94.22, up by 1.28 per cent. September crude oil futures were trading at ₹8935 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of ₹8734, up by 2.30 per cent, and October futures were trading at ₹8670 against the previous close of ₹8484, up by 2.19 per cent.
A statement by the US Central Command said its forces destroyed five Iranian crude oil carriers on September 8, after the Islamic Revolutionary Guard Corps (IRGC) targeted a US Navy warship with ballistic missiles twice over the past two days.
The US warship successfully evaded the attempted Iranian attacks and continued to patrol regional waters. No American personnel were harmed, it said.
“In response to Iran’s most recent failed attacks, CENTCOM destroyed the IRGC crude oil carriers M/T Kaviz, M/T Charminar, M/T Horizon 1, and M/T Riesco in the Gulf of Oman as well as M/T Derya near Kharg Island. American forces directed the crews to abandon ship before the vessels were struck and rendered inoperable,” it said.
In their Commodities Feed for Wednesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said the oil market continues to move higher this morning as West Asia tension escalates. ICE Brent is close to breaking above $100 a barrel. Given developments in the region, it seems only a matter of time before the market tests this key level. They said the market is likely to continue to price in a sizeable risk premium.
“Despite the escalation, estimates on oil flows through the Strait of Hormuz are edging higher, with suggestions that flows are in the region of 10 million barrels a day – 50 per cent of pre-war levels. These volumes now look far more in line with what the US previously indicated was moving through the vital choke point,” they said.