Prices climbing as much as $7 per barrel? This energy expert said it could happen:
The second alleged attack on tankers near the Strait of Hormuz in roughly a month has heightened concerns about oil security in the region and tensions between the U.S. and Iran, leaving at least one analyst suggesting an escalation in incidents could add $7 to the price per barrel.
Prices for oil rallied Thursday, with July West Texas Intermediate crude CLN19, -0.75% up $1.14, or 2.2%, to settle at $52.28 a barrel on the New York Mercantile Exchange — erasing some of the 4% loss seen just a day earlier. August Brent crude BRNQ19, -0.24% added $1.34, or 2.2%, to $61.31, also rebounding from a 3.7% loss Wednesday.
“The irony is, not only Saudi and UAE oil is targeted, but even those in Asia who decided to stop importing from Iran,” said Alhajji. “These attacks will not only raise the political and insurance premium, they will lower supplies too,” so there’s a “triple-layer impact.” “Given the lack of clear information, there is a risk that the U.S. government will interpret the recent attacks as a potential sign of Iranian aggression in the region; the national security advisor, John Bolton, indicated as much after the attacks that occurred last month,” she said. “U.S.-Iran tensions are already running high as Iran’s deadline to stop complying with some aspects of its nuclear agreement, unless European countries help it to maintain exports, approaches in the next 30 days.
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