Oil Rises on Hormuz Attacks After Falling 21% Since Start of November
Key Facts
Oil futures rose on November 11 as shipping risks in the Strait of Hormuz returned to the fore. Brent crude gained 2.35% to $93.64 a barrel, while West Texas Intermediate rose 1.96% to $87.73 at 1704 GMT, according to Reuters. The move came after both benchmarks posted steep losses since the start of the month, as hopes of ending the war faded. The Associated Press said Iran’s Revolutionary Guard reported that a tanker caught fire after striking a mine while following a route it described as unauthorized. At the same time, UKMTO reported an incident involving a tanker in the strait, but it was unclear whether the two reports referred to the same incident. The price gains thus coincided with conflicting reports about safe navigation through the passage.
The Iranian military said on November 7 that two tankers struck mines in the Hormuz area and caught fire, without identifying their flags or destinations, according to the Associated Press. The agency cited a separate account from the Revolutionary Guard concerning a tanker said to have caught fire after striking a mine, with its route described as unauthorized. The agency was unable to determine whether the Guard’s statement and the UKMTO report concerned the same incident. The absence of that clarification leaves the number of incidents involved unresolved in the available reports, while accounts attributed to Iranian authorities remain attributed to their sources. The available facts did not include independent confirmation of the circumstances of those incidents.
October data highlight the scale of the maritime risk before the latest reports. The Associated Press said the month saw the highest number of attacks on commercial vessels in the Strait of Hormuz since March. Data from the Washington Institute for Near East Policy, cited by Reuters, showed 37 ships were attacked in October, the highest monthly total since the war began. This places the tanker reports within a month that saw an exceptional concentration of attacks on commercial vessels. By contrast, oil prices have fallen since the start of November as hopes of an end to the war grew, with Brent down about 21% and West Texas Intermediate down about 17% through November 11, according to Reuters. The current session’s rise followed that decline rather than erasing it.
The risks extended to energy facilities in Riyadh on November 8, when a building belonging to Aramco was damaged by falling debris, according to the Associated Press. Saudi Arabia’s energy ministry said there were no injuries at the facility. The agency reported that the Saudi-led coalition intercepted two ballistic missiles and two cruise missiles targeting Riyadh and other areas that morning. The Houthis’ military spokesman also said the group had targeted Riyadh’s financial district and other sites in response to attacks in Yemen, according to the agency. These events broaden the scope of disruption from maritime navigation to infrastructure and targets across the region, without by themselves establishing a specific effect on prices.
U.S. Secretary of State Marco Rubio said Washington had asked its partners to help protect shipping, but acknowledged that he had received no response from his counterparts in the Group of Seven. The Associated Press quoted him as saying, "I raised it, and I have not gotten a response," referring to his call for participation in securing navigation. The agency added that U.S. allies, including France, tied the provision of mine-sweepers and other assistance to a halt in the fighting. Opening shipping routes to increased flows remains dependent on operational and security factors; LSEG analysts said it would depend on mine clearance, insurance costs and shipowners’ willingness to take on the risks. These conditions put the safety of the passage, the cost of transiting it and shipping companies’ readiness at the center of any potential recovery in oil flows through the strait.