Oil tops $80 a barrel

Brent crude moved back above $80 a barrel on Thursday after new threats to shipping in the Red Sea and uncertainty over the Strait of Hormuz kept traders focused on Middle East supply risks. Houthi forces in Yemen said on Wednesday they had attacked Saudi oil tankers, while Donald Trump said the strait would reopen “very soon” or Iran would be “hit very hard” again. Brent was at about $80.04 on August 6, according to Trading Economics, after a volatile stretch tied to the Iran war and shifting hopes for a shipping deal. ### Why did oil move back above $80? Houthi spokesperson Yahya Saree said on August 5 that the group had launched missile attacks on Saudi oil tankers near Yanbu in the Red Sea and in the Gulf of Aden, according to Reuters reporting carried by U.S. News. Saudi Arabia had not confirmed the incidents at the time of that report. (usnews.com) The New York Times reported on August 5 that the Houthis had also threatened to widen attacks and close access routes for Saudi oil shipments. That added to concerns about tanker traffic through waterways already strained by months of conflict. ### What did Trump say about the Strait of Hormuz? (usnews.com) CNN reported on August 5 that Trump said the Strait of Hormuz would reopen “very soon” or Iran would be “hit very hard” again. The remark came as markets weighed whether any arrangement could restore shipping through one of the world’s most important oil transit routes. (nytimes.com) Trading Economics said on August 6 that investors were assessing a proposed shipping agreement through the strait and that Iranian officials had described an arrangement with Oman as temporary rather than a full reopening. The site also said the UK Navy had reported explosions near a tanker transiting the strait. (edition.cnn.com) ### How unusual is the current oil price level? Brent was about $70 a barrel before the Iran war began on February 28, then rose above $120 during the conflict before falling back near $70 after a June framework deal, according to BBC reporting carried by Yahoo Finance. After peace talks collapsed, prices climbed again and were around $80 on August 5. (tradingeconomics.com) Trading Economics listed Brent at 80.067 on August 6, up 0.78% on the day and nearly 8% over the past month. Those figures point to a renewed geopolitical premium even as traders continue to watch for signs of restored flows. ### How is the move showing up for drivers? The RAC said on August 5 that diesel in the UK was averaging 181.5 pence a litre, while petrol averaged 161.5 pence. (finance.yahoo.com) Simon Williams, the motoring group’s head of policy, said filling a diesel family car now cost £100 again, a level drivers had not faced since early June. (tradingeconomics.com) BBC reporting said analysts estimate that every $10 increase in crude adds roughly 7 pence a litre to pump prices. It also said retail fuel prices usually lag wholesale moves by about two weeks because oil takes time to work through the supply chain. ### What are traders watching next? (finance.yahoo.com) August 6 pricing showed Brent still near $80 while markets tracked any confirmation of the reported tanker attacks, any Saudi response and any formal announcement on shipping through the Strait of Hormuz. Trump’s August 5 comments and the Houthis’ August 5 claims remain the immediate reference points for the next move in oil. (usnews.com) (finance.yahoo.com)