Brent crude climbed after Iran's joint military command threatened a forceful response against commercial vessels ignoring its approved routes through the Strait of Hormuz. Improving crude flows through the waterway capped the gains.
Brent crude oil pushed higher as tension in the Strait of Hormuz escalated. The front-month ICE Brent contract gained $1.33/bbl on the day to trade at $72.10/bbl at 09.00 GMT.
The move followed a threat from Iran's joint military command of a 'forceful response' against commercial vessels in the Strait of Hormuz that fail to comply with its approved shipping routes. That threat came after the US Central Command pledged safe passage through the region and aligned its mission with allies in the Middle East.
CENTCOM commander Brad Cooper met with military officials from Bahrain, Kuwait, Saudi Arabia, and eight more Middle Eastern countries on Wednesday to discuss vessel transit through the Strait. According to market analysts, that meeting triggered the response from Iran.
Yet the resumption of commercial vessel transit through the Strait largely capped Brent's gains. About 14 million bbls of crude oil passed through the waterway on Wednesday, ANZ Bank's senior commodity strategist Daniel Hynes said, citing Bloomberg ship tracking data. A total of 43 commercial vessels crossed the Strait on the same day, according to maritime intelligence firm Windward.
Hynes said oil is under pressure, according to engine.online: "as crude flows through the Strait of Hormuz continue to improve."
Source: engine.online
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