Brent Nears $100 a Barrel After Iran Threatens Gulf Energy Infrastructure
Key Takeaways
- •Brent crude futures rose 1.6% to $98.73 a barrel while WTI gained 2.9% to $94.14 as supply-disruption risks intensified.
- •Iran threatened to target U.S. and Gulf energy infrastructure and impose a maritime exclusion zone in the Persian Gulf in response to what it calls U.S. economic warfare.
- •Roughly one-fifth of globally traded oil and liquefied natural gas passes through the Strait of Hormuz, leaving few alternative tanker routes.
- •Brent gained 8% and WTI nearly 10% last week amid the U.S.-Iran confrontation, and sustained prices near $100 could fuel inflation in importing economies.
- •Iran said an agreement with Oman on Strait of Hormuz arrangements is close, though markets doubt diplomacy will quickly end the conflict.
Oil prices extended gains on Tuesday, with Brent crude holding above $97 a barrel, as investors weighed the risk of further disruption to Middle East energy supplies after Iran warned that oil and gas infrastructure across the Gulf could be targeted in retaliation for attacks on its assets.
Brent oil futures expiring in November were up 1.6% at $98.73 a barrel by 02:59 ET (06:59 GMT), while U.S. West Texas Intermediate (WTI) crude futures rose 2.9% to $94.14 per barrel. Brent had settled nearly 1% higher on Monday after briefly touching $98 per barrel in the previous session.
The latest gains came after Iran threatened to respond to what it called U.S. "economic warfare" by imposing a maritime exclusion zone across the Persian Gulf. The move follows a weekend of tit-for-tat strikes between the United States and Iran, including attacks on shipping. Iranian officials have since warned that U.S. oil and gas interests and other energy infrastructure across the Gulf are vulnerable to retaliation.
"The oil and gas production chain here is sprawling, accessible, and exposed. American oil and gas companies across these waters and facilities share that exposure," Iranian Parliament Speaker Mohammad Baqer Qalibaf said. "Strike our assets, and you get struck. We've already proven it," he added.
The Strait of Hormuz remains the key focus for oil markets. Roughly a fifth of globally traded oil and liquefied natural gas passes through the waterway, according to the U.S. Energy Information Administration, leaving limited alternative routes for tankers bound for Asian and Western markets. Iran has said it will introduce a new restricted zone in the Gulf as well as an alternative shipping corridor, raising concerns that tighter maritime controls could further slow tanker traffic through the strategic waterway.
Mohsen Rezaei, secretary of Iran's Supreme National Security Council, said on X that Washington had received a "clear warning" from Iran's new missiles, and that any economic warfare would be met with a maritime exclusion zone extending across the Gulf to the perimeter of the U.S. blockade.
Meanwhile, Iran said a deal with Oman over arrangements for the Strait of Hormuz was close, potentially providing a mechanism to ease shipping disruptions. Markets, however, remain skeptical that diplomacy will quickly end the wider U.S.-Iran confrontation.
The conflict has already pushed Brent sharply higher. The benchmark gained 8% last week, while WTI rose nearly 10%. Sustained prices near $100 a barrel would keep upward pressure on fuel costs and inflation for importing economies, which in the past have responded by releasing strategic petroleum reserves — a step that would add another variable for traders watching how the standoff develops.
Source: Investing.com, via Hellenic Shipping News
