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EMEA Oil Update: Oil Prices Spike on Red Sea Blockade, Ongoing US Strikes

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Oil prices surged on Tuesday as markets reacted to a Houthi blockade on Saudi Arabia, continuing US strikes on Iran, and another tanker attack in the Strait of Hormuz.

Brent crude futures rose 1.8% to $90.83 per barrel, while Murban crude futures surged 3.6% to $84.71/bbl.

"Brent briefly topped $90 before paring back below $89. The move came from the Houthi maritime blockade on Saudi Arabia, a tenth consecutive day of US strikes on Iran and a tanker strike in the Strait of Hormuz," Saxo Bank analysts said.

A tanker located about 8 nautical miles northwest of Limah, Oman, was hit by an unknown projectile in the Strait of Hormuz, the UK Maritime Trade Operations reported on Tuesday.

The diplomatic front saw a potential opening after a senior Iranian official reportedly said that Tehran received a mediator-backed proposal for a 10-day ceasefire.

Despite ceasefire discussions, military action has not abated. The US Central Command confirmed via X that a fresh wave of strikes was launched against Iran targeting military capabilities used to disrupt commercial shipping in the Strait of Hormuz.

State-run Indian Oil and Mangalore Refinery and Petrochemicals have canceled upcoming crude oil liftings from Iraq's Basrah Oil Terminal, driven by mounting security threats and attacks on vessels transiting the strategic Strait of Hormuz, Reuters reported Tuesday, citing sources.

On the supply side, the US Department of Energy released data showing that Strategic Petroleum Reserve inventories dropped by 5.1 million barrels over the week ending July 17, falling to 311.4 million barrels, down from 316.5 million barrels the prior week.

TPH Energy noted that higher crude prices drove renewable diesel margins higher, lifting renewable fuel stocks by 7.1% over the past week.

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Oil & Energy

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Oil & Energy

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