Oil prices plummeted further on Wednesday after the further increase in crude oil inventories in the USA. Then yesterday morning the “saving” circumstance for the oil price came on the table, that two oil tankers were attacked in the Gulf of Oman. Now the question is: Who attacked them and why? Is the passage of oil tankers from Bahrain, Kuwait, Iraq, UAE and Saudi Arabia to the open sea still safe? Yesterday we wrote that such incidents in the Middle East had never led to even a rudimentary serious threat to global oil supplies for decades.
Why would Iran do such a thing?
Will it be a more serious incident this time? After all the USA is currently blaming Iran for the attack with all its power. But why should Iran do that? A good question. According to US Secretary of State Pompeo this is an unacceptable escalation of the situation by Iran. In the meantime the USA has published a video (here the original link of the US military) showing a boat of the Iranian Revolutionary Guards removing a limpet mine from a tanker because it had not exploded. So first the mine that didn’t explode. And then a missile attack? But you don’t see it in the video. Whether the video really shows Iranian aggressors, and whether this is proof of the following Iranian attacks? We do not presume to judge. Again the question: Why should Iran do such a thing? Or could it perhaps be that within the Iranian military individual commanders dance out of line and attack tankers on their own authority?
The U.S. insists Iran carried out the attack. But they have not yet been able to provide any real proof of the attack itself. And again the question: Why should Iran do this? So as to increase its chances of regaining free access to the global oil market? This is more likely to achieve the opposite. And Iran urgently needs money! In the meantime Iran calls the accusations of the USA “sabotage diplomacy”.
What about the oil price?
What will the oil price do? Yesterday morning WTI oil started its rise at $51.40 due to tanker attacks. Then yesterday at noon it rose to $53.42. Since then the price has returned well to 52.13 dollars. The currently published video of the US military has not yet influenced the oil price this morning. Because if the video should be a real proof for an Iranian participation in the attack, a further escalation in the region would be quite probable.
If this issue continues to escalate the oil price could of course continue to rise significantly. Overshadowing all other issues in the short term. But as we have already written. In the past such disruptions to oil supplies in the Gulf region have only ever proved to be very short-term and rather harmless events for the futures market. Now it’s up to oil speculators to decide. Will this again be such a harmless event? If so, the attention of the markets can fall back again on the constantly rising oil stocks in the USA and apparently too much oil supply on the world market. Then WTI oil could again look in the direction of 50 dollars. In the chart since 4th of June we show the falling oil price on Wednesday, and then since yesterday the rotation.