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Brent crude oil prices surged to a six-week high near $100/barrel as attacks on commercial vessels by the U.S. and Iran disrupted shipping through the Strait of Hormuz. Tanker traffic fell to a 10-day low of 10 ships/day, according to Kpler analytics, raising fears of a supply shock. Goldman Sachs warned prices could rise to $120/barrel if attacks intensify, while Brent futures climbed 0.92% to $97.17, reflecting heightened market volatility.

The escalation of attacks on oil tankers by the U.S. and Iran has intensified concerns over the Strait of Hormuz, a critical chokepoint for global energy flows. Tanker traffic through the strait dropped to an 10-day low of 10 ships/day, the lowest level since May, according to analytics firm Kpler. This decline has shifted market focus from geopolitical conflict to the physical risk of disrupted crude flows, with Goldman Sachs forecasting prices could reach $120/barrel if attacks worsen. Brent crude futures rose 0.92% to $97.17, while West Texas Intermediate (WTI) gained 0.85% to $92.27, extending a week-long rally that saw Brent climb 8% and WTI rise 10%.

The attacks have transformed the risk profile for oil markets, with commercial vessels now being used as tools of economic pressure. Maritime intelligence firm Marisks noted that the deliberate targeting of tankers blurs the line between military confrontation and commercial shipping. Saudi Arabia reported two deaths from an Iranian attack on its tanker, while Oman evacuated 16 crew members from a targeted vessel. These incidents underscore the operational risks facing maritime operators and highlight the strategic importance of securing alternative shipping routes for Gulf producers.

Gulf states like the UAE and Saudi Arabia are diversifying their trade routes to mitigate exposure to the conflict. The UAE is constructing alternative pathways for energy exports, while OPEC+ maintained its output policy for October, leaving market dynamics increasingly dependent on geopolitical stability. Analysts warn that sustained attacks could trigger a supply shock, with reduced tanker traffic potentially leading to a sharper price surge. The situation underscores the vulnerability of global energy markets to geopolitical tensions and the growing reliance on alternative infrastructure to safeguard supply chains.

Iran plans to announce a restricted zone near the Strait of Hormuz in the coming days, according to Supreme National Security Council secretary Mohsen Rezaei. OPEC+ will review its production quotas ahead of determining next steps, while the UAE continues developing alternative energy export routes to bypass the strait.

Oil prices near $100/barrel as tanker attacks disrupt the Strait of Hormuz, raising the risk of a supply shock. Goldman Sachs warns prices could exceed $120/barrel if attacks continue, but OPEC+ maintains current output policy. Gulf producers are diversifying shipping routes to mitigate exposure, though market volatility remains a key risk.

Topics: ENERGY MARKETS, GLOBAL OIL, GEOPOLITICAL RISK, SHIPPING ROUTES, OPEC, PETROLEUM, SUPPLY SHOCK, ENERGY SECURITY

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Source: ET Markets