Brent crude futures ended Friday at $117.64 a barrel, up 2.4 percent, after a tanker was attacked in the Strait of Hormuz.
The December Brent contract has gained 14 percent over the month, according to foreign media reports. The more actively traded January Brent contract rose 2.4 percent to $113.43 a barrel. December West Texas Intermediate crude rose 2.1 percent to $104.12, a monthly gain of 15 percent.
The UK Maritime Trade Operations said on Friday that a tanker crossing the Strait of Hormuz was attacked by a small boat carrying two explosive devices. A day earlier, Yemen’s Houthi militants claimed attacks on several sites in Saudi Arabia, including the Ras Tanura and Rabigh refineries and a Saudi Aramco facility at Abqaiq. A Ukrainian strike on a Russian refinery added to supply concerns.
Oman said on Friday that its navy had evacuated 25 crew members from the Panama-flagged merchant ship RITI after it was targeted and a fire broke out on board. The ship-tracking website Marine Traffic described the vessel as a crude oil tanker. Iran said three oil tankers were halted while crossing the strait.
Ole Hansen of Saxo Bank said oil prices have been supported by Middle East supply disruptions and tight markets for refined products. The trading advisory firm Ritterbusch and Associates said markets were on edge about possible military escalation in the Middle East after the US midterm elections.
US Central Command chief Brad Cooper said in a video released on Friday that US forces had cleared the strait’s main transit routes of Iranian sea mines and remain present to keep them open.
Background
Iran has restricted shipping through the Strait of Hormuz since the West Asia war began on 28 February with US-Israeli strikes on the country. The strait normally carries about a fifth of the world’s oil.
Gulf oil exports have recovered. They averaged 15.7 million barrels a day in the week to 26 October, at times matching or exceeding pre-war levels, The Wall Street Journal reported. Shipping remains more dangerous and more expensive, with higher insurance and freight costs. Cooper said US forces have helped Gulf countries export more than 1.5 billion barrels of crude through the strait since summer.
What it means
Sri Lanka imports its petroleum, so world oil prices and shipping costs feed into what the country pays for petrol, diesel and kerosene. The Ceylon Petroleum Corporation (CPC) revises fuel prices periodically under a formula that takes world prices and the exchange rate into account.
Sri Lankans working in Gulf states are among the main sources of the country’s remittances, which makes developments in the region relevant to many households at home.
