Global oil prices experienced an upward trajectory on Monday following a drone attack on U.S. forces in Jordan, raising concerns about potential disruptions to the Middle East’s oil supply. The incident coincided with intensified attacks by Houthi rebels on vessels in the Red Sea, notably targeting a fuel tanker operated by Trafigura.
Brent crude futures saw a rise of 29 cents, equivalent to 0.4%, reaching $83.84 per barrel, with an intraday high of $84.80. Concurrently, U.S. West Texas Intermediate crude increased by 34 cents, or 0.4%, settling at $78.35 per barrel, having touched $79.29 earlier in the session.
The drone strike on U.S. troops in Jordan heightened concerns about a broader conflict unfolding in the oil-rich Middle East. RBC Capital analyst Helima Croft expressed the view that the incident marked a critical juncture in the region’s ongoing conflicts, raising the potential for increased U.S. involvement. Croft emphasized that a more direct confrontation with Iran could escalate and lead to disruptions in regional energy supplies.
Trafigura, a prominent commodities trader, announced on Saturday that it is evaluating security risks for future Red Sea voyages following an attack on a tanker operated by the Houthi group. The incident has sparked concerns about the safety of oil tankers linked to the U.S. and UK, prompting the market to reassess the risks of potential disruptions.
ANZ analysts noted that while supply disruptions had been limited, the attack on Trafigura’s oil tanker altered the landscape. The analysts stated, “With oil tankers linked to the U.S. and UK now under threat of attack, the market is likely to reprice the risk of disruptions.”
The combination of geopolitical tensions and the targeting of vessels in key waterways has heightened uncertainty in the oil market, leading to increased volatility as investors closely monitor developments in the Middle East.