Crude oil prices rose more than 2 per cent on Thursday after a cargo vessel was hit by an unknown projectile near Oman, putting an evacuation effort for ships from the key Strait of Hormuz on hold.
Brent futures gained $1.52 or 2.1 per cent to settle at $75.26 a barrel, while the US West Texas Intermediate (WTI) crude chalked up $1.58 or 2.3 per cent to trade at $71.92 per barrel.
The flow of oil and gas has been disrupted since the joint US-Israeli attacks on Iran at the end of February, but the agreement between the US and Iran to end the war has allowed the resumption of traffic through the crucial strait.
The United Nations International Maritime Organisation on Thursday paused its effort to shepherd ships and seafarers through the strait after the cargo ship reported a suspected attack. This reawakened concerns about the worldwide flow of oil.
Reuters reported that Iran fired on the cargo ship as it attempted to pass through the strait after Iranian authorities said the security of vessels passing outside designated Hormuz routes is not guaranteed.
Previously, crude shipments through the strait rose to their highest since the start of the war on Wednesday. Before the war, about 20 per cent of world oil supplies passed through the Strait, located between Iran and Oman.
Key fuel oil producers Iraq, Saudi Arabia, and Oman have moved to increase shipments from ports outside the Persian Gulf. Middle Eastern fuel oil exports are set to jump by 20 per cent from May to about 508,000 barrels per day in June.
US Secretary of State Marco Rubio told Gulf allies on Thursday that any deal with Iran would take their interests into account, as he wrapped up a Middle East trip aimed at winning over regional partners with deep reservations about the preliminary accord.
The US and the six-member Gulf Cooperation Council (GCC) said a lasting peace would mean addressing Iran’s ballistic missiles, drones and support for proxy groups. However, the US also threatened that if Iran threatens or blocks ships in the strait, there will be a “problem.”
The Wall Street Journal reported that Iran estimates charging for security, safety and environmental services in the strait, which would bring in $40 billion a year for the states involved.
In Venezuela, thousands were feared dead after two powerful earthquakes affected the capital, Caracas. The quakes could slow the increase in Venezuelan oil exports expected by US President Donald Trump’s administration after it captured Venezuela’s President Nicolas Maduro in January.