At least two vessels transporting fuel from Kuwait to Europe were rerouted after an attack on a Tock Group tanker.
An executive of Brazil's state-owned oil giant Petroleo Brasileiro SA (Petroleo Brasileiro SA) said that if attacks on ships sailing the Red Sea escalate, oil prices could break through $90 per barrel this year.
“Our oil and gas business is very vulnerable,” CEO Jean-Paul Prattes said in an interview with Bloomberg TV. “No one paid attention to this for decades. (Red Sea) has Yemen on one side and Somalia on the other.”
Prates said Petrobras, headquartered in Rio de Janeiro, was unaffected by the attack because the company did not transport large amounts of oil through the waterway. Yemen's Houthis have been targeting Red Sea ships to show support for the Palestinian Islamic Resistance Movement (Hamas).
Prats also added that Brazil will help mediate the border dispute between Venezuela and Guyana. ExxonMobil has discovered billions of barrels of oil in the region, and Petrobras may be investing in oil projects in these two countries.
Platts believes that if there is no escalation in the Red Sea situation, oil prices should continue to trade between $70 and $90 this year.
On Tuesday, international crude oil traded sideways, and the market waited for the US to respond to the attack on the US military in Jordan. This may lead to an escalation of tension in key regions of global crude oil production.
US officials and experts say the White House is seeking a tough enough response to deter Iran and its proxies without triggering a direct war with Tehran. Biden's challenge was to show a tough attitude during the election year without spurring a rise in oil prices.
Biden is under pressure from some Republicans to directly attack Iran, but the most likely scenario is that armed groups supported by Iran will be targeted. US National Security Council spokesman John Kirby said the president met with the national security team on Sunday and Monday and “is weighing the choices before him.”
Daniel Hines, senior commodity strategist at ANZ Group Holdings Ltd., said: “America's response will be critical. The market's perception of supply risk has definitely changed in recent days.”
Oil prices are expected to rise monthly due to the escalation of attacks on commercial shipping in the Red Sea by the Houthis in Yemen. Despite this, strong supply from non-OPEC oil producers and concerns about demand are putting pressure on the outlook.
Brent crude oil futures prices are expected to rise for the first time in 4 months
After the Houthis attacked an oil tanker, at least two ships carrying fuel from Kuwait to Europe appear to have changed their routes to avoid crossing the Red Sea.
According to the charter list compiled by Bloomberg and information from data intelligence provider Kpler, both the Minerva Pacific and the Advantage Porto Cervo booked by KOC carried cargo to Middle Eastern countries.
Both ships made the Suez Canal their next destination over the weekend, which meant venturing across the Strait of Mande near Yemen. However, the two ships now seem to be turning, and one of them appears to be preparing to sail around Africa for more than a thousand miles.
An oil tanker chartered by commodity trading giant Tork Group was hit by a missile while sailing in the Gulf of Aden last Friday. This is the worst blow to oil shipping vessels since the Houthis began attacking passing merchant ships in the Red Sea at the end of last year.
Although many tankers had avoided the region until then, some tankers, including regional oil giants such as Saudi Aramco, continued to sail. According to ship tracking data collected by Bloomberg, on Sunday alone, at least six batches of crude oil and fuel passed through this main channel.