Oil & Energy
EMEA Oil Update: Crude Prices Push Past $95 per Barrel Amid Dual Chokepoint Risks
Crude oil benchmarks extended rally on Thursday, hitting its highest in more than a month propelled by escalating geopolitical tensions, Red Sea tanker attacks, and growing risks to global trade routes.Brent crude futures climbed 2.4% to $96.35 per barrel, while Murban crude futures rose by 4.7% to $93.63/bbl. Both contracts hit their highest since early June."Crude oil extended its rally, with Brent rising as much as 2.5% to almost 96.50 dollars a barrel, its highest since early June, after Iran-backed Houthi militants struck two Saudi tankers in the Red Sea," Saxo Bank analysts said.Meanwhile, US Central Command pushed back against claims by Iran's military that it controlled the Strait of Hormuz, asserting via social media that the international waterway remains open for transit."Iran does not control the Strait of Hormuz," US Centcom posted on X.However, markets are heavily pricing in the probability of severe supply interruptions across critical energy corridors, analysts noted."Oil prices are increasingly shaped not only by observed fundamentals but by what the market believes fundamentals will look like over the next 6-12 months," ANZ analysts noted.Ahmad Assiri, research strategist at Pepperstone, pointed out that these higher energy costs are feeding back into the broader inflation outlook, adding that physical disruptions do not require a complete halt to Gulf exports to tighten the market.Reduced vessel traffic, shipping delays, and rerouting are already sufficient to constrain effective global supply, the research strategist added.Attention has also expanded beyond the Strait of Hormuz to the Bab al-Mandab strait, a vital route accounting for nearly 12% of global trade.Compounding regional instability, Reuters reported that Yemen's Houthi movement targeted two Saudi oil tankers, with maritime security confirming that the Saudi-flagged tanker Encelia was struck in the Red Sea.