Oil settles up $3 as Iran reviews bill to ban US, Israeli vessels from Hormuz
Oil Market Reactions and Geopolitical Developments
By Georgina McCartney
Oil Price Movements
HOUSTON, Aug 6 (Reuters) - Oil prices settled up by more than $3 a barrel on Thursday on news an Iranian parliament committee is reviewing a bill that would ban U.S. and Israeli vessels from the Strait of Hormuz and fine violators up to a fifth of the value of their cargo.
Brent crude futures settled up $3.04, or 3.83%, to $82.49 a barrel. U.S. West Texas Intermediate futures settled up $2.07, or 2.75%, to $77.29.
Iranian Legislative Actions
An Iranian lawmaker said a parliament committee is reviewing a preliminary bill to ban U.S., Israeli and other vessels deemed hostile from the Strait of Hormuz, and fine violators of the proposed restrictions up to 20% of cargo value, according to Fars news agency.
Market Sentiment
"Crude traders remain focused on the U.S./Iran agreements, and the longer the delays, the more prices will fade back to the upside," said Dennis Kissler, senior vice president of trading at BOK Financial.
Before the Iran conflict began in late February, about one-fifth of global daily oil and liquefied natural gas supplies flowed through the Strait of Hormuz.
Regional Tensions and Security Risks
Yemeni Houthi Attacks
Meanwhile, Yemen's Houthis said they carried out missile and drone attacks on "Saudi deployments" in Marib and Hadramout in Yemen on Thursday, and that they killed or wounded hundreds of Saudi-aligned fighters, and destroyed military camps, weapons depots and vehicles.
Implications for Oil Transit Routes
"The market is going up and down as tensions rise and fall and of course these attacks are a significant development because it is more activity in the other theatre, away from the Persian Gulf, and is a reminder that the Red Sea passageway could still be in jeopardy," said John Kilduff, partner at Again Capital.
Geopolitical Risks Persist
GEOPOLITICAL RISKS PERSIST
Gulf countries' crude oil and condensate exports were largely steady in July and remained about 40% below pre-war levels, shipping data showed.
Iranian Threats and Regional Security
Iran has warned Gulf states that any new U.S. attack on its territory would trigger attacks on critical energy infrastructure across the region, according to five sources, as Tehran seeks to raise the cost of military action by threatening Washington's closest regional allies.
Houthi Missile Attacks on Oil Tankers
The Iran-aligned Houthis said on Wednesday they had launched a missile attack on a Saudi oil tanker off the coast of the kingdom's Red Sea port city of Yanbu and another missile attack on a Saudi oil tanker in the nearby Gulf of Aden. There was no confirmation from Saudi Arabia on either incident.
"Houthi attacks so far have not significantly disrupted oil and gas supply but this might change if attacks escalate further," said Roberto Cominotto, equity research analyst at Julius Baer.
Saudi Oil Pricing and Russian Refinery Incident
Saudi Arabia has slightly lowered the official selling price for its flagship Arab Light crude oil to Asia in September, a pricing document reviewed by Reuters showed.
Elsewhere, a major oil refinery in Russia's Yaroslavl region was on fire after a big Ukrainian drone attack and emergency services are working to put out the blaze, Mikhail Evrayev, the regional governor, said on Thursday.
Reporting Credits
(Reporting by Georgina McCartney in Houston, Anushree Mukherjee, Yuka Obayashi in Tokyo and Siyi Liu in Singapore, Anushree Mukherjee in Bengaluru; Editing by Nia Williams, Kirsten Donovan and Sanjeev Miglani)
