Oil prices climbed on Thursday as hopes for a quick end to the Hormuz standoff took two hits in one day. Brent crude gained more than 3% in late trading and US benchmark WTI was up almost 3%, according to Oilpricelive data.
It is a sharp turn from earlier in the week, when Brent dropped to its lowest level since August on signs that talks between Washington and Tehran were moving ahead. Even with Thursday's gain, Brent is still a little under last Friday's close and roughly 14% lower than at the end of October.
Iran says four tankers were hit
Four oil tankers have been damaged by blasts in the Strait of Hormuz after disregarding warnings, according to Iran's military. Reuters, which reported the claims, said the number comes from two separate statements.
- The navy of the Revolutionary Guards said two supertankers were put out of action on Wednesday. It said they had used the strait's southern side, a path it has declared an "unauthorised route". Iranian state media said both had run into naval mines.
- Iran's regular army said two further tankers ran into mines in the eastern strait on Thursday afternoon and then caught fire. State TV said those ships had switched off their radar.
None of this has been independently confirmed. Reuters said it had not been able to check the Iranian version of events.
UKMTO, the British maritime agency that tracks threats to shipping, described an attack of its own. It said a vessel on its way out of the strait on Wednesday was struck by a projectile of unknown origin roughly 14 nautical miles off Ras Al-Khaimah in the United Arab Emirates. The engine room caught fire and everyone on board was taken off the ship.
Ship traffic through Hormuz has been recovering, but so have the attacks. The Washington Institute for Near East Policy has counted at least 10 ships hit between Nov. 1 and Nov. 10. In October it counted 37, more than in any month since the fighting started in late February.
Trump says the US does not need a deal
The second blow came from Washington. Donald Trump posted on social media on Thursday that the US no longer needs an agreement with Iran.
"Those days have long since passed. We've got their money, Hundreds of Billions of Dollars, and we've got their Strait!" the president wrote.
That puts a question mark over an Iranian proposal that Qatar's prime minister brought to the White House earlier this week. According to media reports citing diplomatic sources, Tehran would open Hormuz again and stop attacking tankers. Washington, for its part, would lift the blockade on Iran's ports and unfreeze $8 billion of Iranian money sitting in Qatar. The two governments have not confirmed any of this.
Supply data pointed the other way
Prices rose even though the day's supply news was bearish.
- US crude stocks grew by 4.7 million barrels last week and now stand at 414.4 million, according to the Energy Information Administration. A Reuters poll of analysts had pointed to a drop of 1.1 million.
- Fuel stocks rose too. Distillates, the category that covers diesel, added 4.1 million barrels, and gasoline stocks also increased.
- OPEC+ pumped more in October, mostly because of a jump in Saudi production.
The stop-and-start peace headlines, on Iran and on Ukraine, seem to be wearing thin. "It is beginning to look like investors are growing weary from hearing the same song on peace prospects," Timothy Snyder, chief economist at Matador Economics, told Reuters.
What to watch
The first thing to look for is whether anyone outside Iran confirms the four tanker strikes.
Tehran's answer to Trump's post matters too. And on Friday the International Energy Agency is due to publish its monthly oil market report, which will show how it sees supply and demand heading into winter.