Oil gains over 3% as fresh military strikes threaten Hormuz shipments

By Anushree Mukherjee

July 13 (Reuters) - Oil prices surged more than 3% on Monday after renewed military strikes between the United States and Iran reignited concerns over energy shipments through the Strait of Hormuz.

Brent crude futures were up $2.39, or 3.14%, to $78.40 at 1321 GMT, while U.S. West Texas Intermediate crude was up $2.17, or 3.04%, to $73.58 a barrel. Both contracts rose more than 4% earlier in the session. 

"The focus will remain on the number of inbound tankers as a lower number could impact production, so currently we see a risk premium and a disruption risk supporting prices," said UBS analyst Giovanni Staunovo.

Fresh U.S. and Iranian strikes over the weekend fueled fears of a renewed escalation. Tehran targeted U.S. facilities across the Gulf on Sunday and said it had again closed the Strait of Hormuz. Iran's Revolutionary Guards said on Monday they had attacked U.S. military bases in Kuwait and Bahrain.

Before the conflict began in late February, the Strait of Hormuz handled about one-fifth of global daily oil and liquefied natural gas supplies.

"Shipping operators are adopting a cautious approach and inbound movements have slowed under heightening security concerns," ANZ analysts said.

Six vessels transited the strait on Sunday, ship-tracking data from Kpler showed, carrying Iranian crude and Kuwaiti oil products — the lowest number in five weeks. 

The escalating attacks cast doubt on the future of an interim U.S.-Iranian agreement signed last month that aimed to reopen the strait and end the war after a further 60 days of negotiations.

While President Donald Trump said the U.S. would probably take over the strait and should be reimbursed for controlling the vital waterway, Iran's top joint military command said it would not allow Washington to intervene in the management of the strait and any attempt by the U.S. to transit the strait without its authorisation would be strongly confronted.

Goldman Sachs estimated that expanding pipeline capacity in the Middle East could shield more than 60% of pre-war Gulf oil exports from any future Hormuz disruptions by end-2028.

The bank's base-case forecast assumes pipeline capacity bypassing Hormuz will rise by 3.8 million bpd by end-2027 and 7.3 million bpd cumulatively by end-2028, taking total effective bypass capacity to more than 14 million bpd by end-2028.

Iranian oil supplies held at sea are rising after Tehran boosted exports during the interim peace deal with the U.S. However, sales have been slow as China's independent refiners have turned to cheaper crude from Iraq, the UAE and Qatar.

The Abu Dhabi National Oil Company set the August official selling price of its benchmark Murban crude at $80.01 a barrel, it said on Monday, down from $101.48 a barrel the month before.

Elsewhere, Ukraine's Security Service said it struck an oil depot in Russia's Stavropol region overnight, as well as three storage tanks at an oil-loading site in the port of Kavkaz in the southern Russian region of Krasnodar.

The Iran-aligned Houthi movement that controls northern Yemen accused Saudi Arabia of launching airstrikes against the international airport in Sanaa, and vowed to retaliate.

(Reporting by Anushree Mukherjee in Bengaluru, Florence Tan, Helen Clark. Editing by Muralikumar Anantharaman and Mark Potter)