Iran attacks two ships inside Strait of Hormuz
Brent crude at 106 dollars as European gas touches four-year high, equity markets near records while the war premium lands at the pump
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Oil prices rise after reported attacks on ships in Strait of Hormuz
euronews.com
Iran has moved from target to attacker in the Gulf shipping war. Oil prices climbed on Wednesday after Iran reportedly attacked two vessels inside the Strait of Hormuz, according to a Reuters report, using tactics described as new. A month ago the strikes ran the other way: attacks on Iranian tankers pushed Brent past $100 a barrel. Brent crude futures gained 0.5 per cent to $106.24 in early European trading; West Texas Intermediate rose 0.5 per cent to $94.64.
The escalation is not confined to the strait. Saudi Arabia said an attack on an Aramco building in the kingdom's east sparked a "limited fire", and that debris from intercepted Houthi missiles wounded four people in Riyadh. The Houthi war with Saudi Arabia now runs as a second front of supply risk. European gas prices reached a four-year high, with Dutch TTF futures just above €86 per megawatt-hour, a notch below the previous peak of €87.44.
What is being repriced is the passage, not the oil. As with last month's spike, the market is pricing sea risk — insurance, rerouting, refining margins — rather than missing barrels. That bill does not stop at the trading desk. When the European Commission's fuel price series set its own records last month, crude accounted for less than a quarter of what a 50-litre tank cost an EU driver; taxes and margins took the rest. The Hormuz premium lands on top of that stack.
Equity markets carried the escalation lightly. Euro Stoxx 50 futures were slightly higher at the open and Wall Street had finished Tuesday near its records. Goldman Sachs opened more than 4 per cent up on a quarterly profit that beat expectations before finishing 0.2 per cent lower, and analysts tracked by FactSet expect nearly 30 per cent year-on-year earnings growth for S&P 500 companies in the third quarter. The yield on the 10-year Treasury slipped to 5.21 per cent.
Pump prices are already a midterm instrument in the United States, and Washington has spent the same weeks easing sanctions on Russian diesel. The premium from the strait travels a different route — through insurance and freight — and it is itemised at the pump, on top of the tax layers already sitting there.
Brent opened Wednesday at $106.24 a barrel; the S&P 500 had closed the previous day a fraction below the record it set last week.