Global oil prices rose by about 2% on Thursday after commercial vessel traffic through the Strait of Hormuz and the Bab el-Mandeb Strait dropped sharply, renewing concerns over crude supply routes despite indications that Iran and Oman are nearing an agreement on the joint management of the Hormuz waterway.
As of 3:50 p.m. WAT, Brent crude traded at $81.04 per barrel, up $1.59 or 2.00%, while U.S. West Texas Intermediate (WTI) rose $1.19 or 1.58% to $76.41 per barrel, recovering from earlier weakness.
Shipping data reviewed by Reuters showed that traffic through the region's two key oil transit routes slowed considerably on Wednesday. Only two vessels passed through the Strait of Hormuz, compared with eight vessels a day earlier.
Activity at the Bab el-Mandeb Strait, which links the Red Sea to the Arabian Sea, also declined sharply. According to Kpler shipping data cited by Reuters, only one commodity vessel, a Bahamas-flagged dry bulk carrier, transited the passage on Wednesday, down from 20 vessels recorded on Tuesday.
The latest disruption followed claims by Yemen's Iran-backed Houthi movement that it had struck a Saudi oil tanker in the Red Sea.
In a statement carried by Middle East news outlet Al Bawaba, the group said it carried out a military operation targeting the Saudi oil tanker WAFAA near the Yanbu area using multiple ballistic missiles.
Maritime intelligence company Windward identified the vessel as NCC WAFA, a Saudi-flagged products tanker that last transmitted its position on July 19 while sailing south through the Red Sea toward the Bab el-Mandeb Strait.
According to Windward's analysis, the tanker likely reversed course after the Houthis announced a blockade on July 22, returning north through Saudi coastal waters before reportedly coming under attack hundreds of kilometres from the declared blockade zone.
The latest incident comes as security analysts and vessel-tracking firms told the BBC that threats to commercial shipping across the Gulf and the Red Sea have intensified to their highest level since the conflict involving Iran escalated.
Despite the deteriorating security environment, the market has drawn some support from diplomatic developments.
Iran's Foreign Ministry spokesperson, Esmaeil Baghaei, said discussions with Oman on a framework for the joint management of the Strait of Hormuz are in their final stages, raising expectations that crude and liquefied natural gas flows through the strategic waterway could gradually improve if an agreement is reached.
However, the sharp reduction in vessel movements through both Hormuz and Bab el-Mandeb continues to reinforce concerns over near-term supply risks, supporting the rebound in global crude prices.