Red Sea casualties and attacks fuel supply concerns, international oil prices soar as Brent approaches $90

Zhitong Finance APP reports that on Wednesday, international oil prices rose. Although diplomatic channels suggested that the Strait of Hormuz may soon be reopened, fatal attacks on merchant ships in the Red Sea and Gulf of Oman have further intensified supply risks in key global shipping lanes.

Benchmark Brent crude oil futures increased by about 0.93%, to $89.74 per barrel; US WTI crude oil futures rose 0.97%, closing at $84.01 per barrel.

The Houthis, backed by Iran, attacked a cargo ship in the Bab el-Mandeb Strait on Tuesday, resulting in six deaths. This marks the first reported casualties in over a year amid attacks on Red Sea shipping. Hours later, the US military said it launched missiles at a container ship, claiming it was attempting to break Washington's blockade of Iranian ports.

These incidents highlight that the Middle East conflict, ongoing for nearly six months, is increasingly impacting two of the world's key shipping routes, despite apparent diplomatic progress in talks to reopen the Strait of Hormuz.

Jose Torres, Senior Economist at Interactive Brokers, stated that although the prospects for a US-Iran agreement on the Strait of Hormuz have become clearer, market concerns over Middle Eastern oil supply persist. The Pakistani side is optimistic about a US-Iran agreement, but Torres noted that the market is still waiting for substantive progress.

In his report on Tuesday evening, he said: “For weeks, investors have been betting on the deal coming to fruition. At the current stage, without concrete progress, yields are unlikely to fall significantly, nor is the stock market likely to rise further.” He also pointed out that the slight rise in oil prices itself indicates that supply-side concerns triggered by geopolitical tensions have not yet subsided.