Oil Rises to One-Week High; Hormuz Remains a Threat
Oil prices strengthened again during Tuesday's trading (Aug 11), reaching their highest closing levels in about a week. Brent rose 1.4% to US$88.91 per barrel, while WTI gained 1.3% to US$83.20. Both benchmarks recorded their highest closes since July 31.
This rise follows a surge of approximately 5% in the previous session, as the market began to doubt the likelihood of a peace agreement between the United States and Iran. Such uncertainty has reignited fears that energy supply disruptions in the Middle East could be prolonged.
Mohsen Rezaei, the new secretary of Iran's Supreme National Security Council, stated that the Strait of Hormuz would remain closed until the US changes its stance and meets Iran's conditions for ending the war. Prior to the conflict, about 20% of the world's oil supply passed through this strategic waterway.
Shipping data indicates that vessel activity through Hormuz remains very low. Only about six ships passed through on Monday, compared to a 10-day average of around 11 vessels. Before the war, daily traffic on the route ranged from approximately 125 to 140 ships.
Tensions have also spread to the Red Sea and Bab el-Mandeb regions. Houthi rebels in Yemen reportedly attacked a Saudi vessel carrying military equipment, while other attacks on container ships have further heightened concerns regarding the security of energy trade routes.
Newsmaker Analysis: As long as the Strait of Hormuz remains closed to normal traffic and regional tensions stay high, oil prices are likely to remain supported by a supply risk premium. Brent is edging closer to the US$90 mark, and a breakthrough above that level could pave the way for further gains. However, any concrete signal pointing toward a US-Iran agreement still has the potential to trigger a sharp correction.
Source: Newsmaker.id
