Crude oil futures advanced on Tuesday after two tankers were struck by projectiles while transiting the Strait of Hormuz, stoking fears of disruptions to shipping through the strategic waterway.
Front-month West Texas Intermediate crude futures gained 3% to $70.61 per barrel, while Brent futures climbed 3.2% to $74.26/bbl.
Saxo Bank strategists said oil prices rose after a Qatari LNG ship was struck by a projectile near the Omani coast as it exited the Strait of Hormuz, raising unease among shipowners while once again testing the US-Iran peace deal.
On Tuesday, two tankers were struck by projectiles in the Strait of Hormuz, the UK Maritime Trade Operations said, the latest attacks targeting vessels transiting the strategic waterway that is central to the US-Iran negotiations.
This takes the total tally of vessels attacked in the strait this week to three, as the UKMTO reported that a tanker was also struck on Monday.
Iran's Islamic Revolutionary Guard Corps attacked a liquefied natural gas carrier after ignoring warnings while passing through the Omani route, according to Iranian media reports.
Qatar's foreign ministry spokesperson, Majed Al Ansari, said the targeting of the Qatari tanker near the Hormuz was an unacceptable attack on the security of international navigation and global energy supplies.
Al Ansari called on Tehran to "immediately cease all practices that undermine regional security or threaten the safety of international maritime navigation." A Saudi-flagged crude oil tanker was also reportedly damaged off Oman's coast.
Soojin Kim, a research analyst at MUFG, said crude prices edged higher after renewed attacks on commercial vessels in the Strait of Hormuz highlighted persistent security risks.
Meanwhile, global crude prices are projected to face renewed downward pressure as crude production rebounds and trade flows via the strategic waterway recover following the US-Iran peace deal to end the Middle East conflict, according to the Energy Information Administration.
The EIA in its Short-Term Energy Outlook slashed its Brent spot price forecast for Q3 to an average of $74/bbl, about $27 lower than its previous outlook.
The EIA said that the recovery in supply and the restoration of oil trade flows are expected to ease pressure on global inventories.
The agency now forecasts global oil inventories to decline by 2.2 million barrels per day in Q3, lower than its previous forecast of over 7 million b/d.
Curbing the gains, OPEC+ countries agreed to another modest hike in their oil production quotas for August, adding to prospects of more supply as crude prices fall.
The seven countries, led by Saudi Arabia and Russia, agreed to increase quotas by 188,000 barrels per day, on top of similar increases for June and July.