SINGAPORE- Oil prices climbed on Monday after a drone attack on US forces in Jordan added to worries over supply disruption in the Middle East as Houthi rebels stepped up their attacks on vessels in the Red Sea, hitting a Trafigura-operated fuel tanker.
Risks of a widening conflict comes as Russian refined product exports are set to fall, with several refineries under repair following drone attacks.
Brent crude futures rose 29 cents, or 0.4 percent , to $83.84 a barrel after hitting a session-high of $84.80. US West Texas Intermediate crude gained 34 cents, or 0.4 percent , to $78.35 a barrel after reaching an intraday high of $79.29 earlier in the session.
The attack on US troops in a drone strike in Jordan raised concerns of a wider conflict in the oil-rich Middle East.
“We believe the death of three US service members today in Jordan marks a critical inflection point in the ongoing conflict in the Middle East and raises a specter of a more substantial US involvement in the war,” RBC Capital analyst Helima Croft said in a note, adding that a more direct confrontation with Iran raises the specter of regional energy supply disruptions.
Commodities trader Trafigura said on Saturday it was assessing the security risks of further Red Sea voyages after firefighters put out a blaze on a tanker attacked by Yemen’s Houthi group a day earlier.
“Disruptions to supply have been limited, but that changed on Friday after an oil tanker operating on behalf of Trafigura was hit by a missile off the coast of Yemen,” ANZ analysts said in a note.
