Brent oil tops $90 as US, Iran intensify attacks in Middle East

By Florence Tan

SINGAPORE, July 20 (Reuters) – Oil prices rose 3 percent on Monday after the United States and Iran stepped up attacks restricting energy shipments in the Strait of Hormuz in the Middle East; Brent exceeded $90 per barrel.

Brent crude futures rose 2.69 GMT, or 3.05%, to $90.79, touching the highest level since June 11 and extending gains after last week’s 15.9% gain, its biggest weekly gain since April.

U.S. West Texas Intermediate crude rose $2.19, or 2.65%, to $84.68 a barrel, the highest level since June 12. Front-month prices rose 15.5% last week, marking the biggest weekly rise since the beginning of March.

Conflict in the Middle East escalated over the weekend as the US launched its ninth consecutive night of attacks against Iran; US allies Kuwait and Bahrain reported that Iran carried out more attacks.

Both sides have targeted shipping traffic in recent days; The United States said it imposed a naval blockade of Iranian ports, while Iran said it generally targeted ships that violated its rules in the Strait of Hormuz, which handles a fifth of global oil trade.

A ship burned northwest of Qumzar, Oman, the UK’s Merchant Marine Operations agency said in a statement early on Monday.

“The coming days and weeks will provide a clearer picture of the sustainable level of oil exports from the region under renewed bilateral blockades,” Barclays analyst Amarpreet Singh said in a note.

“As things stand, we think oil markets are still more than satisfied with the potential decline in stocks, which, unlike at the beginning of the war, are at their tightest in five years.”

LSEG data showed four ships transited the Strait of Hormuz on Sunday, down from eight the previous day. Data showed that at least three oil product tankers and one Very Large Crude Oil Carrier have entered the strait since Friday to load oil.

(Reporting by Florence Tan; Editing by Sonali Paul)