Traders bid up oil as risks around the Strait of Hormuz resurfaced. By 8:29 a.m. ET, Brent was up 3% to $100.86 and WTI was higher by 3% at $95.84.
The U.S. military said it destroyed five Iranian crude oil tankers on Tuesday in response to attempted attacks on a U.S. warship. U.S. Central Command said the ship evaded the assault and no American personnel were harmed.
The confrontation is now in its seventh month. After a surge of violence in July, both sides largely pulled back for about a month, while Washington shifted to economic pressure on Tehran. Hostilities have re-erupted, with Iran persisting in strikes on merchant traffic in and around the Strait of Hormuz.
Speaking on CNBC's "Squawk Box Asia," Goldman Sachs's Daan Struyven, who serves as co-head of global commodities research, said the latest escalation raises the risk of prices moving above $120 a barrel if attacks on shipping intensify. Goldman's base case still assumes Persian Gulf exports gradually recover as producers work around disruptions, including by rerouting shipments and eventually adding pipeline capacity. Even so, Struyven said the recent flare-up has increased the odds of a more bullish outcome in which exports do not recover in the coming months because of tanker attacks.
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Two paths to watch: if exports gradually recover as Goldman expects, that would align with a less extreme price path. If tanker attacks prevent a rebound in flows, Struyven sees a greater chance of prices clearing $120. Translation for anyone with oil exposure: headlines around Hormuz could keep price swings lively.
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