Oil Prices Rise on Growing Supply Risks amid Fresh Attacks


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil and product futures rose Tuesday (7/21) morning on 
mounting supply disruptions and growing geopolitical risks amid several fresh 
attacks on tankers from the Strait of Hormuz to the Black Sea. Oil exports from 
the Persian Gulf, meanwhile, have slowed to an almost complete standstill.

   By 08:40am ET, ICE Brent for September delivery was up $1.61 near $90.83 
bbl, and NYMEX WTI for August delivery on its last trading day rose $1.73 to 
$84.96 bbl. The more actively traded September contract gained $1.57 to $84.05 
bbl.

   Downstream, NYMEX ULSD futures for August delivery edged higher $0.0085 to 
$4.1275 gallon, and front-month RBOB futures advanced $0.0322 to $3.4212 gallon.

   The US dollar index inched up 0.084 points to 100.865 against a basket of 
foreign currencies.

   Ukraine has over the past months stepped up its attacks on Russian energy 
infrastructure, affecting oil exports and refining operations. Russia's main 
Black Sea port of Novorossiysk, which also houses Kazakhstan main crude oil 
export terminal, experienced several drone strikes over the past few days. On 
Monday, two tankers were attacked while loading Kazakh oil, leading to a 
suspension of operations. According to OPEC secondary sources, Kazakhstan 
produces around 1.87 million bpd of crude oil, the vast majority of which is 
exported via the Black Sea.

   The U.S., meanwhile, continued to ramp up attacks on Iran as fighting 
entered its tenth day following the collapse of the ceasefire and the 
reinstatement of U.S. and Iranian blockades of the Strait of Hormuz. The latest 
attack on a tanker in the strait was reported early Tuesday by UK's Maritime 
Trade Operations agency. Iran's Revolutionary Guard on Tuesday vowed to 
continue to block oil and gas exports from the region. Traffic tracking data 
indicated that only a single laden tanker visibly exited the Persian Gulf on 
Monday.

   Supply woes were also fueled by a Houthi statement on Monday announcing a 
blockade of Saudi oil exports. Attacks by the Iran-aligned Yemeni militia on 
ships crossing Bab-el-Mandeb have between 2024 and 2025 severely disrupted 
traffic through the Suez Canal.

   Deescalation hopes sparked by reports about revived diplomatic efforts to 
end the U.S.-Iranian war, including a ten-day ceasefire proposal, meanwhile, 
kept supply-disruption induced gains in check.

    




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