On the rise again....

Oil prices rise amid conflicting messages on Strait of Hormuz

By Anna Cooban

Global oil prices rose on Wednesday, having slid sharply at the start of the week, after signs of disruption to shipping in the Red Sea and despite talk out of Washington that a deal to reopen the Strait of Hormuz may be imminent.

Brent crude futures, the global oil benchmark, were up 1.3% close to 7.30 a.m. ET to trade at $80 a barrel. WTI, the US benchmark, rose 0.6% to $76 a barrel around the same time.

On Tuesday, President Trump suggested that an announcement about a deal to reopen the Strait of Hormuz could be made by today. But Iranian state media cast doubt on an immediate reopening.

In recent weeks, the conflict has widened to include the Bab al-Mandeb strait, another important maritime trade route at the base of the Red Sea. Iran-backed Houthi militants have threatened to disrupt shipping through the strait — posing an especial problem for Saudi Arabia, which has been using the waterway as an alternative to Hormuz to export millions of barrels of oil.

Alexandre Araman, director of Middle East upstream at Wood Mackenzie, told CNN on Tuesday that the “sharp decline in Red Sea exports removes one of the Kingdom’s few remaining sources of export options.”

Araman noted that some vessels may have transited the strait surreptitiously by turning off their tracking signals.

On Wednesday, Houthi rebels claimed to have attacked a Saudi oil tanker in the Red Sea, according to Reuters. The previous day, Indian authorities said an Indian-flagged vessel had been struck and sunk by a projectile off the coast of Yemen, though did not say who was responsible.